    [Appendix]
    [Detailed Budget Estimates by Agency]
    [Department of Education]
    [From the U.S. Government Printing Office, www.gpo.gov]

                         THE BUDGET FOR FISCAL YEAR 2002

                             DEPARTMENT OF EDUCATION

                  OFFICE OF ELEMENTARY AND SECONDARY EDUCATION

                                  Federal Funds

    General and special funds:

                         Education for the Disadvantaged

        For carrying out [title I of the Elementary and Secondary Education
    Act of 1965, and] section 418A of the Higher Education Act of 1965,
    $30,000,000: Provided, That the budget authority (but not the outlays)
    for $6,758,300,000 provided under this heading in fiscal year 2001, to
    be available as an advance appropriation in fiscal year 2002, and the
    budget authority (but not the outlays) for $195,000,000 provided under
    the heading, ``Reading Excellence'' in fiscal year 2001, to be available
    as an advance appropriation in fiscal year 2002, shall be considered
    direct spending in fiscal year 2002 for purposes of the Balanced Budget
    and Emergency Deficit Control Act of 1990, as amended, and section 2(a)
    of Public Law 106-554: Provided further, That under this heading in the
    Department of Education Appropriations Act, 2001, as enacted by section
    1(a)(1) of P.L. 106-554, to carry out section 1124 of the Elementary and
    Secondary Education Act, delete ``$7,332,721,000'' and insert in lieu
    thereof, ``$7,237,721,000'' [$9,532,621,000, of which $2,731,921,000
    shall become available on July 1, 2001, and shall remain available
    through September 30, 2002, and of which $6,758,300,000 shall become
    available on October 1, 2001 and shall remain available through
    September 30, 2002, for academic year 2001-2002: Provided, That
    $7,332,721,000 shall be available for basic grants under section 1124:
    Provided further, That $225,000,000 of these funds shall be allocated
    among the States in the same proportion as funds are allocated among the
    States under section 1122, to carry out section 1116(c): Provided
    further, That 100 percent of these funds shall be allocated by states to
    local educational agencies for the purposes of carrying out section
    1116(c): Provided further, That all local educational agencies receiving
    an allocation under the preceding proviso, and all other local
    educational agencies that are within a State that receives funds under
    part A of title I of the Elementary and Secondary Education Act of 1965
    (other than a local educational agency within a State receiving a
    minimum grant under section 1124(d) or 1124A(a)(1)(B) of such Act),
    shall provide all students enrolled in a school identified under section
    1116(c) with the option to transfer to another public school within the
    local educational agency, including a public charter school, that has
    not been identified for school improvement under section 1116(c), unless
    such option to transfer is prohibited by State law, or local law, which
    includes school board-approved local educational agency policy: Provided
    further, That if the local educational agency demonstrates to the
    satisfaction of the State educational agency that the local educational
    agency lacks the capacity to provide all students with the option to
    transfer to another public school, and after giving notice to the
    parents of children affected that it is not possible, consistent with
    State and local law, to accommodate the transfer request of every
    student, the local educational agency shall permit as many students as
    possible (who shall be selected by the local educational agency on an
    equitable basis) to transfer to a public school that has not been
    identified for school improvement under section 1116(c): Provided
    further, That up to $3,500,000 of these funds shall be available to the
    Secretary on October 1, 2000, to obtain updated local educational agency
    level census poverty data from the Bureau of the Census: Provided
    further, That $1,364,000,000 shall be available for concentration grants
    under section 1124A: Provided further, That grant awards under sections
    1124 and 1124A of title I of the Elementary and Secondary Education Act
    of 1965 shall be not less than the greater of 100 percent of the amount
    each State and local educational agency received under this authority
    for fiscal year 2000 or the amount such State and local educational
    agency would receive if $6,883,503,000 for Basic Grants and
    $1,222,397,000 for Concentration Grants were allocated in accordance
    with section 1122(c)(3) of title I: Provided further, That
    notwithstanding any other provision of law, grant awards under section
    1124A of title I of the Elementary and Secondary Education Act of 1965
    shall be made to those local educational agencies that received a
    Concentration Grant under the Department of Education Appropriations
    Act, 2000, but are not eligible to receive such a grant for fiscal year
    2001: Provided further, That the Secretary shall not take into account
    the hold harmless provisions in this section in determining State
    allocations under any other program administered by the Secretary in any
    fiscal year: Provided further, That $8,900,000 shall be available for
    evaluations under section 1501 and not more than $8,500,000 shall be
    reserved for section 1308, of which not more than $3,000,000 shall be
    reserved for section 1308(d): Provided further, That $210,000,000 shall
    be available under section 1002(g)(2) to demonstrate effective
    approaches to comprehensive school reform to be allocated and expended
    in accordance with the instructions relating to this activity in the
    statement of the managers on the conference report accompanying Public
    Law 105-78 and in the statement of the managers on the conference report
    accompanying Public Law 105-277: Provided further, That in carrying out
    this initiative, the Secretary and the States shall support only
    approaches that show the most promise of enabling children served by
    title I to meet challenging State content standards and challenging
    State student performance standards based on reliable research and
    effective practices, and include an emphasis on basic academics and
    parental involvement]. (Department of Education Appropriations Act,
    2001, as enacted by section 1(a)(1) of P.L. 106-554.)

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-0900-0-1-501      2000 actual   2001 est.   2002 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
          Direct program:

            Grants to local educational
                agencies:
    00.01     Basic grants..................       6,771       6,929       5,408
    00.02     Concentration grants..........       1,147       1,148       1,350
    00.03   Capital expenses................          14           6
    00.04   Even start......................         149         255
    00.05   State agency programs...........         397         432
    00.06   Evaluation......................           9           9
    00.07   Demonstrations of comprehensive
              school reform.................         171         211
    00.08   Migrant education projects......          22          30          30
                                               ---------   ---------  ----------
    10.00   Total new obligations...........       8,680       9,020       6,788
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    21.40 Unobligated balance carried
            forward, start of year..........          16          41
    22.00 New budget authority (gross)......       8,701       8,979       6,788
    22.10 Resources available from
            recoveries of prior year
            obligations.....................           4
                                               ---------   ---------  ----------
    23.90   Total budgetary resources
              available for obligation......       8,721       9,020       6,788
    23.95 Total new obligations.............      -8,680      -9,020      -6,788
    24.40 Unobligated balance carried
            forward, end of year............          41
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
          Discretionary:

    40.00   Appropriation...................       2,496       2,774          30
    55.00   Advance appropriation...........       6,205       6,205
          Mandatory:

    65.00   Advance appropriation...........                               6,758
                                               ---------   ---------  ----------
    70.00   Total new budget authority
              (gross).......................       8,701       8,979       6,788
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
          Unpaid obligations, start of year:

    72.40   Unpaid obligations, start of
              year..........................       3,472       3,616       4,165
                                               ---------   ---------  ----------
    72.99     Obligated balance, start of
                year........................       3,472       3,616       4,165
    73.10 Total new obligations.............       8,680       9,020       6,788
    73.20 Total outlays (gross).............      -8,529      -8,471      -8,846
    73.40 Adjustments in expired accounts
            (net)...........................          -3
    73.45 Recoveries of prior year
            obligations.....................          -4
          Unpaid obligations, end of year:

    74.40   Unpaid obligations, end of year.       3,616       4,165       2,107
                                               ---------   ---------  ----------
    74.99     Obligated balance, end of year       3,616       4,165       2,107
    ----------------------------------------------------------------------------

    [[Page 346]]

        Outlays (gross), detail:
    86.90 Outlays from new discretionary
            authority.......................       5,545       5,441       5,408
    86.93 Outlays from discretionary
            balances........................       2,984       3,030       3,439
                                               ---------   ---------  ----------
    87.00   Total outlays (gross)...........       8,529       8,471       8,846
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................       8,701       8,979       6,788
    90.00 Outlays...........................       8,529       8,471       8,846
    ---------------------------------------------------------------------------

                     Summary of Budget Authority and Outlays

                            (in millions of dollars)

                                         2000 actual  2001 est.   2002 est.
    Enacted/requested:
      Budget Authority..................       8,701       8,979       6,788
      Outlays...........................       8,529       8,471       8,847
    Legislative proposal, not subject to
        PAYGO:
      Budget Authority..................                              10,981
      Outlays...........................                                 549
                                        ------------------------------------
    Total:
      Budget Authority..................       8,701       8,979      17,769
      Outlays...........................       8,529       8,471       9,396
                                        ====================================

                            SUMMARY OF PROGRAM LEVEL

                            (in millions of dollars)

                                         2000-2001
                                          academic
                                            year      2001-2002
                                                    academic year 2002-2003
                                                                academic year
    New Budget Authority................       2,496       2,774      11,011
    Advance appropriation...............       6,205       6,758
                                        ------------------------------------
          Total program level...........       8,701       9,533      11,011
                                        ====================================
    Change in advance appropriation from
    the previous year...................                    +553      -6,758

        The Administration proposes to reverse the misleading budget
    practice of using advance appropriations simply to avoid spending
    limitations. Accordingly, the amount requested to be appropriated for
    2002 is sufficient to provide normal funding and no advance
    appropriation for 2003 is requested. In order to avoid overstating
    discretionary budget authority in 2002, language is proposed to
    designate the advance appropriation budget authority amount as direct
    spending.

        Title I programs.--The Administration is working with Congress to
    develop legislation reauthorizing programs included in the Elementary
    and Secondary Education Act. When new authorizing legislation is
    enacted, resources for the affected programs will be requested. See the
    ``Legislative proposal, not subject to PAYGO'' schedule for additional
    details.

        Migrant education projects.--Funds support grants to institutions of
    higher education and other nonprofit agencies that assist migrant
    students to earn a high school equivalency certificate or to complete
    their first year of college.

                   Object Classification (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-0900-0-1-501      2000 actual   2001 est.   2002 est.
    ----------------------------------------------------------------------------
    25.1  Advisory and assistance services..          10          11
    25.2  Other services....................           9           9
    25.3  Purchases of goods and services
            from Government accounts........           5           6
    41.0  Grants, subsidies, and
            contributions...................       8,656       8,994       6,788
                                               ---------   ---------  ----------
    99.9    Total new obligations...........       8,680       9,020       6,788
    ---------------------------------------------------------------------------

                         Education for the Disadvantaged

                  (Legislative proposal, not subject to PAYGO)

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-0900-2-1-501      2000 actual   2001 est.   2002 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
          Direct program:

            Grants to local educational
                agencies:
    00.01     Basic grants..................                               7,238
    00.02     Concentration grants..........                               1,364
    00.03     Targeted Grants...............                                 459
    00.04   Even start......................                                 250
    00.05   Reading first State grants......                                 900
    00.06   Early reading first.............                                  75
    00.07   State agency programs...........                                 426
    00.08   Evaluation......................                                   9
    00.09   Demonstrations of comprehensive
              school reform.................                                 260
                                               ---------   ---------  ----------
    10.00   Total new obligations...........                              10,981
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    22.00 New budget authority (gross)......                              10,981
    23.95 Total new obligations.............                             -10,981
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
          Discretionary:

    40.00   Appropriation...................                              10,981
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    73.10 Total new obligations.............                              10,981
    73.20 Total outlays (gross).............                                -549
          Unpaid obligations, end of year:

    74.40   Unpaid obligations, end of year.                              10,432
                                               ---------   ---------  ----------
    74.99     Obligated balance, end of year                              10,432
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.90 Outlays from new discretionary
            authority.......................                                 549
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................                              10,981
    90.00 Outlays...........................                                 549
    ---------------------------------------------------------------------------

        The resources in this schedule are proposed for later transmittal
    under proposed legislation to revise and reauthorize programs currently
    authorized under the Elementary and Secondary Education Act of 1965.

        Grants to local education agencies.--Funds are allocated through
    Basic, Concentration, and Targeted Grants formulas for local programs
    that provide extra academic support to help raise the achievement of
    disadvantaged students eligible for services. States will annually
    assess all students in grades 3-8 in at least reading and mathematics.
    School districts will use the assessment results to immediately
    identify, and provide assistance to, low-performing Title I schools;
    after two years of school failure, those schools would be subject to
    progressively stronger corrective measures and students would have the
    option of attending another public school. Following three years of poor
    performance, the program would provide funds to help students transfer
    to a higher-performing public or private school, or to obtain
    supplemental educational services.

        Even start.--Funds support formula grants to States, which award
    grants for local projects to partnerships of local educational agencies
    and other organizations to operate projects integrating early childhood
    education, adult literacy, parenting education, and interactive literacy
    activities between parents and their children into ``family literacy''
    programs for low-income families with children under age seven.

        Reading first State grants.--Funds provide assistance to State and
    local educational agencies in establishing reading programs for students
    in grades K-3 that are grounded in scientifically based reading
    research, in order to ensure that every student can read at grade level
    or above by the third grade.

    [[Page 347]]

        Early reading first.--Funds provide assistance to support local
    efforts, through competitive grants, to enhance the school readiness of
    young children, particularly those from low-income families, through
    scientific, research-based strategies and professional development that
    are designed to enhance the verbal skills, phonological awareness,
    letter knowledge, pre-reading skills, and early language development of
    children ages three through five.

        State agency migrant program.--Funds support formula grants to
    States for educational services to children of migratory farmworkers and
    fishers, with resources and services focused on children who have moved
    within the past 36 months.

        State agency neglected and delinquent program.--Funds support
    formula grants to States for educational services to children and youth
    under age 21 in State neglected, delinquent, or adult correction
    facilities.

        Evaluation.--Funds support national activities to evaluate Title I
    programs and a national assessment of the program's effectiveness in
    helping States, school districts, and schools raise the overall
    achievement of disadvantaged students and narrow the achievement gap.

        Demonstrations of comprehensive school reform.--Funds support
    formula grants to States, which in turn award grants to local
    educational agencies to help participating schools initiate and
    implement comprehensive school reforms based on approaches and methods
    grounded in reliable research and practice.

                   Object Classification (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-0900-2-1-501      2000 actual   2001 est.   2002 est.
    ----------------------------------------------------------------------------
    25.1  Advisory and assistance services..                                  16
    25.2  Other services....................                                  14
    25.3  Purchases of goods and services
            from Government accounts........                                   8
    41.0  Grants, subsidies, and
            contributions...................                              10,943
                                               ---------   ---------  ----------
    99.9    Total new obligations...........                              10,981
    ---------------------------------------------------------------------------

                                   Impact Aid

        For carrying out programs of financial assistance to federally
    affected schools authorized by title VIII of the Elementary and
    Secondary Education Act of 1965, [$993,302,000] $1,130,500,000, of which
    $882,000,000 shall be for basic support payments under section 8003(b),
    $50,000,000 shall be for payments for children with disabilities under
    section 8003(d), [$12,802,000] $150,000,000 shall be for formula grants
    for construction under section [8007] 8007(a), $40,500,000 shall be for
    Federal property payments under section 8002, and $8,000,000, to remain
    available until expended, shall be for facilities maintenance under
    section 8008[: Provided, That $6,802,000 of the funds for section 8007
    shall be available for the local educational agencies and in the amounts
    specified in the statement of the managers on the conference report
    accompanying this Act: Provided further, That from the amount
    appropriated for section 8002, the Secretary shall treat as timely
    filed, and shall process for payment, an application for a fiscal year
    1999 payment from Academy School District 20, Colorado, under that
    section if the Secretary has received that application not later than 30
    days after the enactment of this Act: Provided further, That the
    Secretary of Education shall consider the local educational agency
    serving the Kadoka School District, 35-1, in South Dakota, eligible for
    payments under section 8002 for fiscal year 2001 and each succeeding
    fiscal year, with respect to land in Washabaugh and Jackson Counties,
    South Dakota, that is owned by the Department of Defense and used as a
    bombing range: Provided further, That from the amount appropriated for
    section 8002, the Secretary shall first increase the payment of any
    local educational agency that was denied funding or had its payment
    reduced under that section for fiscal year 1998 due to section
    8002(b)(1)(C) to the amount that would have been made without the
    limitation of that section: Provided further, That from the amount
    appropriated for section 8002, $500,000 shall be for subsection
    8002(j)]. (Department of Education Appropriations Act, 2001, as enacted
    by section 1(a)(1) of P.L. 106-554.)

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-0102-0-1-501      2000 actual   2001 est.   2002 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
          Payments for federally connected children:

    00.01   Basic support payments..........         737         882         882
    00.02   Supplemental payments for
              children with disabilities....          50          50          50
    00.03   Payments for heavily impacted
              districts.....................          74           5
                                               ---------   ---------  ----------
    00.91   Subtotal, payments for federally
              connected children............         861         937         932
    01.01 Facilities maintenance............           6          11          11
    02.01 Construction......................           7           6         150
    03.01 Payments for Federal property.....          32          40          40
    04.01 Construction earmarks.............           3           7
    05.01 Old construction (P.L. 81-815)....           1
                                               ---------   ---------  ----------
    10.00   Total new obligations (object
              class 41.0)...................         910       1,001       1,133
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    21.40 Unobligated balance carried
            forward, start of year..........          24          14           5
    22.00 New budget authority (gross)......         906         993       1,130
    22.10 Resources available from
            recoveries of prior year
            obligations.....................           7
                                               ---------   ---------  ----------
    23.90   Total budgetary resources
              available for obligation......         937       1,007       1,135
    23.95 Total new obligations.............        -910      -1,001      -1,133
    23.98 Unobligated balance expiring or
            withdrawn.......................         -15
    24.40 Unobligated balance carried
            forward, end of year............          14           5           2
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
          Discretionary:

    40.00   Appropriation...................         910         993       1,130
    40.76   Reduction pursuant to P.L. 106-
              113...........................          -4
                                               ---------   ---------  ----------
    43.00     Appropriation (total
                discretionary)..............         906         993       1,130
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
          Unpaid obligations, start of year:

    72.40   Unpaid obligations, start of
              year..........................         249         266         128
                                               ---------   ---------  ----------
    72.99     Obligated balance, start of
                year........................         249         266         128
    73.10 Total new obligations.............         910       1,001       1,133
    73.20 Total outlays (gross).............        -877      -1,140      -1,114
    73.40 Adjustments in expired accounts
            (net)...........................          -9
    73.45 Recoveries of prior year
            obligations.....................          -7
          Unpaid obligations, end of year:

    74.40   Unpaid obligations, end of year.         266         128         148
                                               ---------   ---------  ----------
    74.99     Obligated balance, end of year         266         128         148
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.90 Outlays from new discretionary
            authority.......................         792         887       1,011
    86.93 Outlays from discretionary
            balances........................          85         253         103
                                               ---------   ---------  ----------
    87.00   Total outlays (gross)...........         877       1,140       1,114
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................         906         993       1,130
    90.00 Outlays...........................         877       1,140       1,114
    ---------------------------------------------------------------------------

        Impact Aid helps to replace the lost local revenue that would
    otherwise be available to educate federally connected children. The
    presence of certain students living on Federal property, such as
    students who are military dependents or who reside on Indian lands,
    places a financial burden on local educational agencies that educate
    them. The property on which the children live or their parents work is
    exempt from local property taxes, denying local educational agencies
    access to the primary source of revenue used by most communities to
    finance education.

        Basic support payments.--Payments will be made on behalf of
    approximately 1.2 million federally connected students enrolled in about
    1,360 local educational agencies to assist them in meeting their
    operation and maintenance costs. Average per-student payments will be
    approximately $750.

        Payments for Children with Disabilities.--Payments in addition to
    those provided under the Individuals with Disabilities

    [[Page 348]]

    Education Act will be provided on behalf of approximately 53,000
    federally connected students with disabilities in about 830 local
    educational agencies. Average per-student payments will be approximately
    $940.

        Facilities maintenance.--Funds are used to provide emergency repairs
    for school facilities that serve military dependents and are owned by
    the Department of Education. Funds are also used to transfer the
    facilities to local educational agencies.

        Construction.--Formula payments will be provided to approximately
    155 local educational agencies with large proportions of federally
    connected students. Payments will be made on behalf of about 135,000
    students who are military dependents or who reside on Indian lands.

        Payments for Federal Property.--Payments are made to approximately
    250 local educational agencies in which real property owned by the
    Federal Government represents 10 percent or more of the assessed value
    of real property in the local educational agency.

                           School Improvement Programs

        For carrying out school improvement activities authorized by [titles
    II, IV, V-A and B, VI, IX, X, and XIII] title X-C of the Elementary and
    Secondary Education Act of 1965 (``ESEA''); [the McKinney-Vento Homeless
    Assistance Act; and] the Civil Rights Act of 1964 and part B of title
    VIII of the Higher Education Amendments of 1998, $229,334,000: Provided,
    That the budget authority (but not the outlays) for $1,765,000,000
    provided under this heading in fiscal year 2001, to be available as an
    advance appropriation in fiscal year 2002, shall be considered direct
    spending in fiscal year 2002 for purposes of the Balanced Budget and
    Emergency Deficit Control Act of 1990, as amended, and section 2(a) of
    Public Law 106-554; [$4,872,084,000, of which $2,403,750,000 shall
    become available on July 1, 2001, and remain available through September
    30, 2002, and of which $1,765,000,000 shall become available on October
    1, 2001 and shall remain available through September 30, 2002 for
    academic year 2001-2002: Provided, That $485,000,000 shall be available
    for Eisenhower professional development State grants under part B of
    title II of the Elementary and Secondary Education Act of 1965: Provided
    further, That each local educational agency shall use funds in excess of
    the allocation it received under such part for the preceding fiscal year
    to improve teacher quality by reducing the percentage of teachers who do
    not have State certification or are certified through emergency or
    provisional means; are teaching out of field in some or all of the
    subject areas and grade levels in which they teach; or who lack
    sufficient content knowledge to teach effectively in the areas they
    teach to obtain that knowledge: Provided further, That the local
    educational agency may also use such excess funds for: activities
    authorized under section 2210 of the Elementary and Secondary Education
    Act of 1965; mentoring programs for new teachers; providing
    opportunities for teachers to attend multi-week institutes, such as
    those provided in the summer months, that provide intensive professional
    development in partnership with local educational agencies; and carrying
    out initiatives to promote the retention of highly qualified teachers
    who have a record of success in helping low-achieving students improve
    their academic success: Provided further, That each State educational
    agency may use such excess funds to carry out activities under section
    2207 of the Elementary and Secondary Education Act of 1965: Provided
    further, That each State agency for higher education may use such excess
    funds to carry out activities under section 2211 of the Elementary and
    Secondary Education Act of 1965: Provided further, That both State
    educational agencies and State agencies for higher education may also
    use such excess funds for multi-week institutes, such as those provided
    in the summer months, that provide intensive professional development in
    partnership with local educational agencies; and grants to partnerships
    of such entities as local educational agencies, institutions of higher
    education, and private business, to recruit, and prepare, and provide
    professional development to, and help retain, school principals and
    superintendents, especially for such individuals who serve, or are
    preparing to serve, in high-poverty, low-performing schools and local
    educational agencies: Provided further, That such activities may be
    undertaken in consortium with other States: Provided further, That of
    the funds appropriated for part B of title II of the Elementary and
    Secondary Education Act of 1965, $45,000,000 shall be available to
    States and allocated in accordance with section 2202(b) of that Act
    (except that the requirements of section 2203 shall not apply): Provided
    further, That notwithstanding any other provision of law, each State
    shall use the amount made available under the preceding proviso to
    support efforts to meet the requirements for State eligibility for the
    Ed-Flex Partnership Act of 1999 or the requirements under section 1111
    of title I of the Elementary and Secondary Education Act of 1965:
    Provided further, That $44,000,000 shall be available for national
    activities under section 2102 of the Elementary and Secondary Education
    Act of 1965: Provided further, That of the amount available in the
    preceding proviso, $3,000,000 shall be made available to the Secretary
    for the Troops-to-Teachers Program for transfer to the Defense Activity
    for Non-Traditional Education Support of the Department of Defense:
    Provided further, That the funds transferred under the preceding proviso
    shall be used by the Secretary of Defense to administer the Troops-to-
    Teachers Program, including the selection of participants in the Program
    under the Troops-to-Teachers Program Act of 1999 (title XVII of Public
    Law 106-65; 20 U.S.C. 9301 et seq.): Provided further, That for purposes
    of sections 1702(b) and (c) of the Troops-to-Teachers Program Act of
    1999, the Secretary of Education shall be the administering Secretary
    and may, at the Secretary's discretion, carry out the activities under
    section 1702(c) of that Act and retain a portion of the funds made
    available for the Troops-to-Teachers Program to carry out section
    1702(b) and (c) of that Act: Provided further, That of the amount made
    available under this heading for national activities under section 2102
    of the Elementary and Secondary Education Act of 1965, the Secretary is
    authorized to use a portion of such funds to carry out activities to
    improve the knowledge and skills of early childhood educators and
    caregivers who work in urban or rural communities with high
    concentrations of young children living in poverty: Provided further,
    That of the amount appropriated, $3,208,000,000 shall be for title VI of
    the Elementary and Secondary Education Act of 1965 and to carry out
    activities under part B of the Individuals with Disabilities Education
    Act (20 U.S.C. 1411 et seq.): Provided further, That of the amount made
    available for title VI, $1,623,000,000 shall be available,
    notwithstanding any other provision of law, in accordance with section
    306 of this Act in order to reduce class size, particularly in the early
    grades, using highly qualified teachers to improve educational
    achievement for regular and special needs children: Provided further,
    That of the amount made available for title VI, $1,200,000,000 shall be
    available, notwithstanding any other provision of law, for grants for
    school repair and renovation, activities under part B of the Individuals
    with Disabilities Education Act (20 U.S.C. 1411 et seq.), and technology
    activities, in accordance with section 321 of this Act: Provided
    further, That funds made available under this heading to carry out
    section 6301(b) of the Elementary and Secondary Education Act of 1965
    shall be available for education reform projects that provide same
    gender schools and classrooms, consistent with applicable law: Provided
    further, That of the amount made available to carry out activities
    authorized under part C of title IX of the Elementary and Secondary
    Education Act of 1965, $1,000,000 shall be for the Alaska Humanities
    Forum for operation of the Rose student exchange program and $1,000,000
    shall be for the Alaska Native Heritage Center to support its program of
    cultural education activities: Provided further, That of the amount made
    available for subpart 2 of part A of title IV of the Elementary and
    Secondary Education Act of 1965, $10,000,000, to remain available until
    expended, shall be for Project School Emergency Response to Violence to
    provide education-related services to local educational agencies in
    which the learning environment has been disrupted due to a violent or
    traumatic crisis]. (Department of Education Appropriations Act, 2001, as
    enacted by section 1(a)(1) of P.L. 106-554.)

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-1000-0-1-501      2000 actual   2001 est.   2002 est.
    ----------------------------------------------------------------------------
        Direct program:
          Obligations by program activity:

    00.01   Eisenhower professional
              development State grants......         335         486
    00.02   Innovative education program
              strategies State grants.......          80         386         285
    00.03   Eisenhower professional
              development national
              activities....................                      41
    00.04   Class size reduction............         400       1,374       1,150

    [[Page 349]]

    00.05   School renovation grants........                   1,200
            Safe and drug-free schools and
                communities:
    00.06     State grants..................         110         442         330
    00.07     National programs.............         162         205
    00.08   Inexpensive book distribution...          20          23
    00.09   Arts in education...............          12          28
    00.10   Magnet schools assistance.......         110         110
    00.11   Education for homeless children
              and youth.....................          29          35
    00.12   Women's educational equity......           3           3
    00.13   Training and advisory services..           7           7           7
    00.14   Ellender fellowships............           2           2
    00.15   Education for Native Hawaiians..          23          28
    00.16   Alaska Native education equity..          13          15
    00.17   Charter schools grants..........         145         190         200
    00.18   Advanced placement incentives...          15          22          22
    00.19   Comprehensive regional
              assistance centers............          28          28
                                               ---------   ---------  ----------
    01.00 Total direct program..............       1,494       4,625       1,994
    09.01 Reimbursable program..............          57
                                               ---------   ---------  ----------
    10.00 Total new obligations.............       1,551       4,625       1,994
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    21.40 Unobligated balance carried
            forward, start of year..........           4           6
    22.00 New budget authority (gross)......       1,549       4,619       1,994
    22.10 Resources available from
            recoveries of prior year
            obligations.....................           3
                                               ---------   ---------  ----------
    23.90   Total budgetary resources
              available for obligation......       1,556       4,625       1,994
    23.95 Total new obligations.............      -1,551      -4,625      -1,994
    24.40 Unobligated balance carried
            forward, end of year............           6
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
          Discretionary:

    40.00   Appropriation...................       1,512       3,107         229
    40.76   Reduction pursuant to P.L. 106-
              113...........................         -20
    41.00   Transferred to other accounts...                      -3
                                               ---------   ---------  ----------
    43.00     Appropriation (total
                discretionary)..............       1,492       3,104         229
    55.00   Advance appropriation...........                   1,515
          Mandatory:

    65.00   Advance appropriation...........                               1,765
          Discretionary:

    68.00   Spending authority from
              offsetting collections:
              Offsetting collections (cash).          57
                                               ---------   ---------  ----------
    70.00   Total new budget authority
              (gross).......................       1,549       4,619       1,994
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
          Unpaid obligations, start of year:

    72.40   Unpaid obligations, start of
              year..........................       3,423       2,380       3,906
                                               ---------   ---------  ----------
    72.99     Obligated balance, start of
                year........................       3,423       2,380       3,906
    73.10 Total new obligations.............       1,551       4,625       1,994
    73.20 Total outlays (gross).............      -2,578      -3,099      -3,611
    73.40 Adjustments in expired accounts
            (net)...........................         -12
    73.45 Recoveries of prior year
            obligations.....................          -3
          Unpaid obligations, end of year:

    74.40   Unpaid obligations, end of year.       2,380       3,906       2,289
                                               ---------   ---------  ----------
    74.99     Obligated balance, end of year       2,380       3,906       2,289
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.90 Outlays from new discretionary
            authority.......................         133       1,319       1,247
    86.93 Outlays from discretionary
            balances........................       2,445       1,779       2,364
                                               ---------   ---------  ----------
    87.00   Total outlays (gross)...........       2,578       3,099       3,611
    ----------------------------------------------------------------------------

        Offsets:
          Against gross budget authority and outlays:

    88.00   Offsetting collections (cash)
              from: Federal sources.........         -57
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................       1,492       4,619       1,994
    90.00 Outlays...........................       2,521       3,099       3,611
    ---------------------------------------------------------------------------
        Note.--Includes $846 million in budget authority in 2002 for activities
    previously financed from the Department of Education:

                           (In millions of dollars)
                                              2000 actual      2001 est.
    Office of Elementary and Secondary
     Education, Education Reform............           453             846

                     Summary of Budget Authority and Outlays

                            (in millions of dollars)

                                         2000 actual  2001 est.   2002 est.
    Enacted/requested:
      Budget Authority..................       1,492       4,619       1,994
      Outlays...........................       2,521       3,098       3,611
    Legislative proposal, not subject to
        PAYGO:
      Budget Authority..................                               6,160
      Outlays...........................                                 308
                                        ------------------------------------
    Total:
      Budget Authority..................       1,492       4,619       8,154
      Outlays...........................       2,521       3,098       3,919
                                        ====================================

                            SUMMARY OF PROGRAM LEVEL

                            (in millions of dollars)

                                         2000-2001
                                          Academic
                                            Year      2001-2002
                                                    Academic Year 2002-2003
                                                                Academic Year
    New Budget Authority................       3,052       5,391       6,389
    Advance Appropriation...............       1,515       1,765
                                        ------------------------------------
          Total program level...........       4,567       7,156       6,389
                                        ====================================
    Change in advance appropriation over
    previous year.......................      +1,515        +250      -1,765

        The Administration proposes to reverse the misleading budget
    practice of using advance appropriations simply to avoid spending
    limitations. Accordingly, the amount requested to be appropriated for
    2002 is sufficient to provide normal funding and no advance
    appropriation for 2003 is requested. In order to avoid overstating
    discretionary budget authority in 2002, language is proposed to
    designate the advance appropriation budget authority amount as direct
    spending.

        The Administration is working with Congress to develop legislation
    reauthorizing programs included in the Elementary and Secondary
    Education Act. When new authorizing legislation is enacted, resources
    for the affected programs will be requested. See the ``Legislative
    proposal, not subject to PAYGO'' schedule for additional details.

        Training and advisory services.--Funds support grants to regional
    equity assistance centers that provide technical assistance to school
    districts in addressing equity in education related to issues of race,
    gender, and national origin.

        Charter schools grants.--Funds support grants to State educational
    agencies and charter schools to support the planning, design, initial
    implementation, and dissemination of information regarding model charter
    schools. These schools are created by teachers, parents, and members of
    the community, and are exempt from certain local, State, and Federal
    regulations.

        Advanced placement incentives.--Funds support grants to assist
    States to pay for advanced placement test fees for low-income students
    who are enrolled in advanced placement classes. In States in which no
    eligible low-income individual is required to pay more than a nominal
    fee to take advanced placement tests, funds may be used for other
    purposes to increase the number of low-income students taking these
    tests, such as curriculum development and training of teachers for
    advanced placement courses.

                   Object Classification (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-1000-0-1-501      2000 actual   2001 est.   2002 est.
    ----------------------------------------------------------------------------

          Direct obligations:

    24.0    Printing and reproduction.......           1           2
    25.1    Advisory and assistance services           3           3           1
    25.2    Other services..................          27          29           6
    25.3    Purchases of goods and services
              from Government accounts......           1           1           1
    25.5    Research and development
              contracts.....................           1
    41.0    Grants, subsidies, and
              contributions.................       1,461       4,590       1,986
                                               ---------   ---------  ----------
    99.0      Subtotal, direct obligations..       1,494       4,625       1,994
    99.0  Reimbursable obligations..........          57
                                               ---------   ---------  ----------
    99.9    Total new obligations...........       1,551       4,625       1,994
    ---------------------------------------------------------------------------

    [[Page 350]]

                           School Improvement Programs

                  (Legislative proposal, not subject to PAYGO)

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-1000-2-1-501      2000 actual   2001 est.   2002 est.
    ----------------------------------------------------------------------------
        Direct program:
          Obligations by program activity:

    00.01   State grants for improving
              teacher quality...............                               2,600
    00.02   Transition to teaching..........                                  30
    00.03   Safe and drug free schools......                                 644
    00.04   21st Century community learning
              centers.......................                                 846
    00.05   Educational technology State
              grants........................                                 817
    00.06   Choice and innovation State
              grants........................                                 472
    00.07   State assessments...............                                 320
    00.08   Reform and innovation fund......                                  40
    00.09   Charter schools homestead fund..                                 175
    00.10   Magnet schools assistance.......                                 110
    00.11   Education for Native Hawaiians..                                  28
    00.12   Alaska Native education equity..                                  15
    00.13   Comprehensive regional
              assistance centers............                                  28
    00.14   Education of homeless children
              and youth.....................                                  35
                                               ---------   ---------  ----------
    01.00 Total direct program..............                               6,160
                                               ---------   ---------  ----------
    10.00 Total new obligations.............                               6,160
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    22.00 New budget authority (gross)......                               6,160
    23.95 Total new obligations.............                              -6,160
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
          Discretionary:

    40.00   Appropriation...................                               6,160
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    73.10 Total new obligations.............                               6,160
    73.20 Total outlays (gross).............                                -308
          Unpaid obligations, end of year:

    74.40   Unpaid obligations, end of year.                               5,852
                                               ---------   ---------  ----------
    74.99     Obligated balance, end of year                               5,852
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.90 Outlays from new discretionary
            authority.......................                                 308
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................                               6,160
    90.00 Outlays...........................                                 308
    ---------------------------------------------------------------------------

        The resources in this schedule are proposed for later transmittal
    under proposed legislation to revise and reauthorize programs currently
    authorized under the Elementary and Secondary Education Act of 1965 and
    the McKinney-Vento Homeless Assistance Act.

        State grants for improving teacher quality.--Funds support formula
    grants to States to provide professional development for teachers and
    administrators and to implement other teacher-related reforms.

        Transition to teaching.--Funds support efforts to recruit more high-
    quality teachers, particularly teachers recruited through the Troops to
    Teachers program, into high-poverty local educational agencies.

        Safe and drug-free schools.--Funds support formula grants to States
    and national activities to provide students with drug- and violence-
    prevention programs and to implement strategies to improve school
    safety.

        21st Century community learning centers.--Funds support formula
    grants to States, which award subgrants to centers providing academic
    and related services for youth and other members of the community during
    after-school, weekend, and summer hours.

        Educational technology State grants.--Funds support formula grants
    to States, which would target funds to high-poverty and rural schools,
    to acquire computers, connections, software, and teacher training to
    enable schools to integrate technology effectively into curricula.

        Choice and Innovation State grants.--Funds support formula grants to
    States to help local educational agencies implement innovative
    strategies for improving student achievement, including enhancing school
    choice.

        State assessments.--Funds support grants to develop and implement
    the new assessments that States would use to annually test all children
    in grades 3-8 in reading and mathematics.

        Reform and innovation fund.--Funds support projects that demonstrate
    and develop innovative approaches in priority areas of national
    significance, including school choice and character education.

        Charter schools homestead fund.--Funds support competitive grants to
    public entities, such as State and local governments, nonprofit
    entities, and consortia of the two types of entities, to assist charter
    schools in acquiring, leasing, and renovating school facilities.

        Magnet schools assistance.--Funds support competitive grants to
    local educational agencies to establish and operate magnet school
    programs that are part of an approved desegregation plan.

        Education for Native Hawaiians.--Funds provide supplemental
    education services to Native Hawaiians in the areas of family-based
    education, special education, gifted and talented education, higher
    education, curriculum development, teacher training and recruitment, and
    community-based learning.

        Alaska Native education equity.--Funds provide supplemental
    education services to Alaska Natives in the areas of educational
    planning, curriculum development, teacher training, teacher recruitment,
    student enrichment, and home-based instruction for pre-school children.

        Comprehensive regional assistance centers.--Funds support
    comprehensive regional technical assistance centers that provide
    services to recipients of Federal education funds to improve elementary
    and secondary education programs.

        Education for homeless children and youth.--Funds support formula
    grants to States to provide educational and support services that enable
    homeless children and youth to enroll in, attend, and achieve success in
    school.

                   Object Classification (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-1000-2-1-501      2000 actual   2001 est.   2002 est.
    ----------------------------------------------------------------------------
    24.0  Printing and reproduction.........                                   1
    25.1  Advisory and assistance services..                                   8
    25.2  Other services....................                                   7
    25.3  Purchases of goods and services
            from Government accounts........                                   1
    41.0  Grants, subsidies, and
            contributions...................                               6,143
                                               ---------   ---------  ----------
    99.9    Total new obligations...........                               6,160
    ---------------------------------------------------------------------------

                               Reading Excellence

        [For necessary expenses to carry out the Reading Excellence Act,
    $91,000,000, which shall become available on July 1, 2001 and shall
    remain available through September 30, 2002 and $195,000,000 which shall
    become available on October 1, 2001 and remain available through
    September 30, 2002.] (Department of Education Appropriations Act, 2001,
    as enacted by section 1(a)(1) of P.L. 106-554.)

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-0011-0-1-501      2000 actual   2001 est.   2002 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
    00.01 Reading Excellence................          76         302         195
                                               ---------   ---------  ----------
    10.00   Total new obligations...........          76         302         195
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    21.40 Unobligated balance carried
            forward, start of year..........          27          16
    22.00 New budget authority (gross)......          65         286         195
                                               ---------   ---------  ----------
    23.90   Total budgetary resources
              available for obligation......          92         302         195

    [[Page 351]]

    23.95 Total new obligations.............         -76        -302        -195
    24.40 Unobligated balance carried
            forward, end of year............          16
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
          Discretionary:

    40.00   Appropriation...................          65          91
    55.00   Advance appropriation...........                     195
          Mandatory:

    65.00   Advance appropriation...........                                 195
                                               ---------   ---------  ----------
    70.00   Total new budget authority
              (gross).......................          65         286         195
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
          Unpaid obligations, start of year:

    72.40   Unpaid obligations, start of
              year..........................         233         282         397
                                               ---------   ---------  ----------
    72.99     Obligated balance, start of
                year........................         233         282         397
    73.10 Total new obligations.............          76         302         195
    73.20 Total outlays (gross).............         -27        -187        -234
          Unpaid obligations, end of year:

    74.40   Unpaid obligations, end of year.         282         397         358
                                               ---------   ---------  ----------
    74.99     Obligated balance, end of year         282         397         358
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.90 Outlays from new discretionary
            authority.......................                      24          21
    86.93 Outlays from discretionary
            balances........................          27         162         212
                                               ---------   ---------  ----------
    87.00   Total outlays (gross)...........          27         187         234
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................          65         286         195
    90.00 Outlays...........................          27         187         234
    ---------------------------------------------------------------------------

        Reading Excellence.--The Administration is working with Congress to
    develop legislation reauthorizing programs included in the Elementary
    and Secondary Education Act. The Administration anticipates enactment of
    a new Reading First initiative supporting early literacy efforts and
    that the Reading and Literacy Grants program will not be continued.
    Funds for the Reading First initiative are requested in fiscal year 2002
    under the Education for the Disadvantaged account. See the ``Legislative
    proposal, not subject to PAYGO'' schedule in the Education for the
    Disadvantaged account for additional details.

                   Object Classification (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-0011-0-1-501      2000 actual   2001 est.   2002 est.
    ----------------------------------------------------------------------------
    25.1  Advisory and assistance services..           5           5
    25.2  Other services....................           4           4
    41.0  Grants, subsidies, and
            contributions...................          67         293         195
                                               ---------   ---------  ----------
    99.9    Total new obligations...........          76         302         195
    ---------------------------------------------------------------------------

                                Education Reform

        [For carrying out activities authorized by title IV of the Goals
    2000: Educate America Act as in effect prior to September 30, 2000, and
    sections 3122, 3132, 3136, and 3141, parts B, C, and D of title III, and
    section 10105 and part I of title X of the Elementary and Secondary
    Education Act of 1965, $1,880,710,000, of which $38,000,000 shall be for
    the Goals 2000: Educate America Act, and of which $191,950,000 shall be
    for section 3122: Provided, That up to one-half of 1 percent of the
    amount available under section 3132 shall be set aside for the outlying
    areas, to be distributed on the basis of their relative need as
    determined by the Secretary in accordance with the purposes of the
    program: Provided further, That if any State educational agency does not
    apply for a grant under section 3132, that State's allotment under
    section 3131 shall be reserved by the Secretary for grants to local
    educational agencies in that State that apply directly to the Secretary
    according to the terms and conditions published by the Secretary in the
    Federal Register: Provided further, That with respect to all funds
    appropriated to carry out section 10901 et seq. in this Act, the
    Secretary shall strongly encourage applications for grants that are to
    be submitted jointly by a local educational agency (or a consortium of
    local educational agencies) and a community-based organization that has
    experience in providing before- and after-school services and all
    applications submitted to the Secretary shall contain evidence that the
    project contains elements that are designed to assist students in
    meeting or exceeding state and local standards in core academic
    subjects, as appropriate to the needs of participating children:
    Provided further, That $125,000,000, which shall become available on
    July 1, 2001, and remain available through September 30, 2002, shall be
    available to support activities under section 10105 of part A of title X
    of the Elementary and Secondary Education Act of 1965, of which up to 6
    percent shall become available October 1, 2000, and be available for
    evaluation, technical assistance, school networking, peer review of
    applications, and program outreach activities: Provided further, That
    funds made available to local educational agencies under this section
    shall be used only for activities related to establishing smaller
    learning communities in high schools: Provided further, That $46,328,000
    of the funds available to carry out section 3136 of the Elementary and
    Secondary Education Act of 1965, $8,768,000 of the funds available to
    carry out part B of title III of that Act and $20,614,000 of the funds
    available to carry out part I of title X of that Act shall be available
    for the projects and in the amounts specified in the statement of the
    managers on the conference report accompanying this Act.] (Department of
    Education Appropriations Act, 2001, as enacted by section 1(a)(1) of
    P.L. 106-554.)

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-0500-0-1-501      2000 actual   2001 est.   2002 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
    00.01 21st Century community learning
            centers.........................         453         846
    00.02 Small learning communities........                      28          97
                                               ---------   ---------  ----------
    00.91   Direct Program by Activities--
              Subtotal (1 level)............         453         874          97
          Educational technology:

    01.01   Technology literacy challenge
              fund..........................         425         450
    01.02   Technology innovation challenge
              grants........................         146         136
    01.03   Regional technology in education
              consortia.....................          10          10
            National activities:
    01.04     Teacher training in technology          75         125
    01.05     Community-based technology....          33          65
    01.06     Technology leadership
                activities..................           2           2
    01.07   Star schools....................          51          59
    01.08   Ready to learn television.......          16          16
    01.09   Telecommunications demonstration
              project for mathematics.......           8           9
                                               ---------   ---------  ----------
    01.91   Total, Educational technology...         766         872
          Goals 2000:

    02.01   State and local education
              systemic improvement..........         458           8
    02.02   Parental assistance.............          33          38
                                               ---------   ---------  ----------
    02.91   Total, Goals 2000...............         491          46
    03.01 School-to-work opportunities......          81          55
                                               ---------   ---------  ----------
    10.00   Total new obligations...........       1,791       1,847          97
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    21.40 Unobligated balance carried
            forward, start of year..........         133          63          97
    22.00 New budget authority (gross)......       1,765       1,881
    22.21 Unobligated balance transferred to
            other accounts..................         -48
    22.22 Unobligated balance transferred
            from other accounts.............           4
                                               ---------   ---------  ----------
    23.90   Total budgetary resources
              available for obligation......       1,854       1,944          97
    23.95 Total new obligations.............      -1,791      -1,847         -97
    24.40 Unobligated balance carried
            forward, end of year............          63          97
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
          Discretionary:

    40.00   Appropriation...................       1,768       1,881
    40.76   Reduction pursuant to P.L. 106-
              113...........................          -3
                                               ---------   ---------  ----------
    43.00     Appropriation (total
                discretionary)..............       1,765       1,881
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
          Unpaid obligations, start of year:

    72.40   Unpaid obligations, start of
              year..........................       1,847       2,392       2,277
                                               ---------   ---------  ----------
    72.99     Obligated balance, start of
                year........................       1,847       2,392       2,277
    73.10 Total new obligations.............       1,791       1,847          97
    73.20 Total outlays (gross).............      -1,243      -1,963      -1,627
    73.40 Adjustments in expired accounts
            (net)...........................          -2
          Unpaid obligations, end of year:

    74.40   Unpaid obligations, end of year.       2,392       2,277         747
                                               ---------   ---------  ----------
    74.99     Obligated balance, end of year       2,392       2,277         747
    ----------------------------------------------------------------------------

    [[Page 352]]

        Outlays (gross), detail:
    86.90 Outlays from new discretionary
            authority.......................         136         188
    86.93 Outlays from discretionary
            balances........................       1,107       1,775       1,627
                                               ---------   ---------  ----------
    87.00   Total outlays (gross)...........       1,243       1,963       1,627
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................       1,765       1,881
    90.00 Outlays...........................       1,243       1,963       1,627
    ---------------------------------------------------------------------------
        Note.--Excludes $846 million in budget authority in 2002 for activities
    transferred to the School Improvement Programs account. Comparable amounts
    for 2000 ($453 million) and 2001 ($846 million) are included above.

        The Administration is working with the Congress to develop
    legislation reauthorizing programs included in the Elementary and
    Secondary Education Act. The Administration anticipates that the new
    legislation would streamline the 21st Century Community Learning Centers
    program and consolidate educational technology programs into flexible,
    performance-based grants to States. Funds for both programs are
    requested in fiscal year 2002 under the School Improvement Programs
    account. See the legislative proposal in the School Improvement account
    for additional details.

                   Object Classification (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-0500-0-1-501      2000 actual   2001 est.   2002 est.
    ----------------------------------------------------------------------------

          Direct obligations:

    25.1    Advisory and assistance services           5           9
    25.2    Other services..................          11          17
    25.3    Purchases of goods and services
              from Government accounts......           6           8
    25.5    Research and development
              contracts.....................          10
    41.0    Grants, subsidies, and
              contributions.................       1,759       1,812          97
                                               ---------   ---------  ----------
    99.0      Subtotal, direct obligations..       1,791       1,846          97
    99.5  Below reporting threshold.........                       1
                                               ---------   ---------  ----------
    99.9    Total new obligations...........       1,791       1,847          97
    ---------------------------------------------------------------------------

                          Chicago Litigation Settlement

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-0220-0-1-501      2000 actual   2001 est.   2002 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
    10.00 Total new obligations (object
            class 41.0).....................           1           1
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    21.40 Unobligated balance carried
            forward, start of year..........           2           1
    23.95 Total new obligations.............          -1          -1
    24.40 Unobligated balance carried
            forward, end of year............           1
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
          Unpaid obligations, start of year:

    72.40   Unpaid obligations, start of
              year..........................           3           2           1
                                               ---------   ---------  ----------
    72.99     Obligated balance, start of
                year........................           3           2           1
    73.10 Total new obligations.............           1           1
    73.20 Total outlays (gross).............          -2          -2          -1
          Unpaid obligations, end of year:

    74.40   Unpaid obligations, end of year.           2           1
                                               ---------   ---------  ----------
    74.99     Obligated balance, end of year           2           1
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.93 Outlays from discretionary
            balances........................           2           2           1
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................
    90.00 Outlays...........................           2           2           1
    ---------------------------------------------------------------------------

        Funds made available under this account were reappropriated by the
    Supplemental Appropriations Act, 1987 (Public Law 100-71) from funds
    enjoined in United States of America v. Board of Education of the City
    of Chicago. The funds were reappropriated for the specific purpose of
    settling this case. The funds are used by the Chicago Board of Education
    to implement Project CANAL (Creating A New Approach to Learning), the
    project approved by the court to support the Board's desegregation
    efforts.

        The Department of Education provides these funds to the Chicago
    Board of Education in annual increments upon receipt and approval of an
    annual plan for Project CANAL activities.

                                Indian Education

        [For expenses necessary to carry out, to the extent not otherwise
    provided, title IX, part A of the Elementary and Secondary Education Act
    of 1965, as amended, $115,500,000.] (Department of Education
    Appropriations Act, 2001, as enacted by section 1(a)(1) of P.L. 106-
    554.)

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-0101-0-1-501      2000 actual   2001 est.   2002 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
    00.01 Grants to local educational
            agencies........................          62          93
    00.02 Special programs for Indian
            children........................          13          20
    00.03 National activities...............           2           3
                                               ---------   ---------  ----------
    10.00   Total new obligations...........          77         116
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    22.00 New budget authority (gross)......          77         116
    23.95 Total new obligations.............         -77        -116
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
          Discretionary:

    40.00   Appropriation...................          77         116
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
          Unpaid obligations, start of year:

    72.40   Unpaid obligations, start of
              year..........................          86          95         126
                                               ---------   ---------  ----------
    72.99     Obligated balance, start of
                year........................          86          95         126
    73.10 Total new obligations.............          77         116
    73.20 Total outlays (gross).............         -65         -84        -102
    73.40 Adjustments in expired accounts
            (net)...........................          -2
          Unpaid obligations, end of year:

    74.40   Unpaid obligations, end of year.          95         126          25
                                               ---------   ---------  ----------
    74.99     Obligated balance, end of year          95         126          25
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.90 Outlays from new discretionary
            authority.......................           2           6
    86.93 Outlays from discretionary
            balances........................          63          79         102
                                               ---------   ---------  ----------
    87.00   Total outlays (gross)...........          65          84         102
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................          77         116
    90.00 Outlays...........................          65          84         102
    ---------------------------------------------------------------------------

                     Summary of Budget Authority and Outlays

                            (in millions of dollars)

                                         2000 actual  2001 est.   2002 est.
    Enacted/requested:
      Budget Authority..................          77         116
      Outlays...........................          65          85         102
    Legislative proposal, not subject to
        PAYGO:
      Budget Authority..................                                 116
      Outlays...........................                                   6
                                        ------------------------------------
    Total:
      Budget Authority..................          77         116         116
      Outlays...........................          65          85         108
                                        ====================================

        The administration is working with Congress to develop legislation
    reauthorizing programs included in the Elemen

    [[Page 353]]

    tary and Secondary Education Act. When new authorizing legislation is
    enacted, resources for the affected programs will be requested. See the
    ``Legislative proposal, not subject to PAYGO'' schedule for additional
    details.

                   Object Classification (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-0101-0-1-501      2000 actual   2001 est.   2002 est.
    ----------------------------------------------------------------------------
    25.2  Other services....................           2           3
    41.0  Grants, subsidies, and
            contributions...................          75         113
                                               ---------   ---------  ----------
    99.9    Total new obligations...........          77         116
    ---------------------------------------------------------------------------

                                Indian Education

                  (Legislative proposal, not subject to PAYGO)

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-0101-2-1-501      2000 actual   2001 est.   2002 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
    00.01 Grants to local educational
            agencies........................                                  93
    00.02 Special programs for Indian
            children........................                                  20
    00.03 National activities...............                                   3
                                               ---------   ---------  ----------
    10.00   Total new obligations...........                                 116
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    22.00 New budget authority (gross)......                                 116
    23.95 Total new obligations.............                                -116
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
          Discretionary:

    40.00   Appropriation...................                                 116
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    73.10 Total new obligations.............                                 116
    73.20 Total outlays (gross).............                                  -6
    73.40 Adjustments in expired accounts
            (net)...........................
          Unpaid obligations, end of year:

    74.40   Unpaid obligations, end of year.                                 110
                                               ---------   ---------  ----------
    74.99     Obligated balance, end of year                                 110
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.90 Outlays from new discretionary
            authority.......................                                   6
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................                                 116
    90.00 Outlays...........................                                   6
    ---------------------------------------------------------------------------

        The resources in this schedule are proposed for later transmittal
    under proposed legislation to revise and reauthorize programs currently
    authorized under the Elementary and Secondary Education Act of 1965.

        Grants to local educational agencies.--Formula grants support local
    educational agencies in their efforts to reform elementary and secondary
    school programs that serve Indian students, with the goal of ensuring
    that such programs assist participating students in meeting the same
    academic standards as all other students. In 2000, the Department made
    1,168 formula grants to local educational agencies and tribal schools
    serving more than 448,000 students.

        Special programs for Indian Children.--The Department makes
    competitive awards for demonstration projects in early childhood
    education, professional development grants, American Indian Teacher
    Corps grants, and grants for the American Indian Administrator Corps.
    The professional development awards in this activity are designed to
    improve the quality of teachers and administrators in school districts
    with concentrations of Indian students.

        National activities.--Funds support research, evaluation, data
    collection, and related activities.

                   Object Classification (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-0101-2-1-501      2000 actual   2001 est.   2002 est.
    ----------------------------------------------------------------------------
    25.2  Other services....................                                   3
    41.0  Grants, subsidies, and
            contributions...................                                 113
                                               ---------   ---------  ----------
    99.9    Total new obligations...........                                 116
    ---------------------------------------------------------------------------

          OFFICE OF BILINGUAL EDUCATION AND MINORITY LANGUAGES AFFAIRS

                                  Federal Funds

    General and special funds:

                        Bilingual and Immigrant Education

        [For carrying out, to the extent not otherwise provided, bilingual,
    foreign language and immigrant education activities authorized by parts
    A and C and section 7203 of title VII of the Elementary and Secondary
    Education Act of 1965, $460,000,000: Provided, That State educational
    agencies may use all, or any part of, their part C allocation for
    competitive grants to local educational agencies.] (Department of
    Education Appropriations Act, 2001, as enacted by section 1(a)(1) of
    P.L. 106-554.)

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-1300-0-1-501      2000 actual   2001 est.   2002 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
    00.01 Instructional services............         162         180
    00.02 Support services..................          14          16
    00.03 Training grants...................          72         100
    00.04 Foreign language assistance.......           8          14
    00.05 Immigrant education...............         150         150
                                               ---------   ---------  ----------
    10.00   Total new obligations...........         406         460
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    22.00 New budget authority (gross)......         406         460
    23.95 Total new obligations.............        -406        -460
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
          Discretionary:

    40.00   Appropriation...................         406         460
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
          Unpaid obligations, start of year:

    72.40   Unpaid obligations, start of
              year..........................         531         566         578
                                               ---------   ---------  ----------
    72.99     Obligated balance, start of
                year........................         531         566         578
    73.10 Total new obligations.............         406         460
    73.20 Total outlays (gross).............        -363        -448        -419
    73.40 Adjustments in expired accounts
            (net)...........................          -8
          Unpaid obligations, end of year:

    74.40   Unpaid obligations, end of year.         566         578         159
                                               ---------   ---------  ----------
    74.99     Obligated balance, end of year         566         578         159
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.90 Outlays from new discretionary
            authority.......................          17          23
    86.93 Outlays from discretionary
            balances........................         346         425         419
                                               ---------   ---------  ----------
    87.00   Total outlays (gross)...........         363         448         419
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................         406         460
    90.00 Outlays...........................         363         448         419
    ---------------------------------------------------------------------------

                     Summary of Budget Authority and Outlays

                            (in millions of dollars)

                                         2000 actual  2001 est.   2002 est.
    Enacted/requested:
      Budget Authority..................         406         460
      Outlays...........................         363         448         419
    Legislative proposal, not subject to
        PAYGO:
      Budget Authority..................                                 460
      Outlays...........................                                  23
                                        ------------------------------------
    Total:
      Budget Authority..................         406         460         460
      Outlays...........................         363         448         442
                                        ====================================

        Bilingual and immigrant education.--The Administration is working
    with Congress to develop legislation reauthorizing

    [[Page 354]]

    programs included in the Elementary and Secondary Education Act. When
    new authorizing legislation is enacted, resources for the affected
    programs will be requested. See the ``Legislative proposal, not subject
    to PAYGO'' schedule for additional details.

                   Object Classification (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-1300-0-1-501      2000 actual   2001 est.   2002 est.
    ----------------------------------------------------------------------------
    25.5  Research and development contracts           5           6
    41.0  Grants, subsidies, and
            contributions...................         401         454
                                               ---------   ---------  ----------
    99.9    Total new obligations...........         406         460
    ---------------------------------------------------------------------------

                        Bilingual and Immigrant Education

                  (Legislation proposal, not subject to PAYGO)

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-1300-2-1-501      2000 actual   2001 est.   2002 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
    00.06 Bilingual and immigrant education
            State grants (proposed
            legislation)....................                                 460
                                               ---------   ---------  ----------
    10.00   Total new obligations (object
              class 41.0)...................                                 460
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    22.00 New budget authority (gross)......                                 460
    23.95 Total new obligations.............                                -460
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
          Discretionary:

    40.00   Appropriation...................                                 460
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    73.10 Total new obligations.............                                 460
    73.20 Total outlays (gross).............                                 -23
          Unpaid obligations, end of year:

    74.40   Unpaid obligations, end of year.                                 437
                                               ---------   ---------  ----------
    74.99     Obligated balance, end of year                                 437
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.90 Outlays from new discretionary
            authority.......................                                  23
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................                                 460
    90.00 Outlays...........................                                  23
    ---------------------------------------------------------------------------

        The resources in this schedule are proposed for later transmittal
    under proposed legislation to revise and reauthorize programs currently
    authorized under the Elementary and Secondary Education Act of 1965.

        Bilingual and immigrant education State grants.--This program would
    provide formula grants to States based on their share of the Nation's
    limited English proficient and immigrant student population. States
    would make subgrants to local educational agencies based on their share
    of the State's limited English proficient and immigrant students. School
    districts would implement programs designed to assist participating
    students in learning English within three years and in meeting State
    standards in core content areas. States and local educational agencies
    would be accountable for demonstrating annual increases in the English
    proficiency of participating students.

             OFFICE OF SPECIAL EDUCATION AND REHABILITATIVE SERVICES

                                  Federal Funds

    General and special funds:

                                Special Education

        For carrying out the Individuals with Disabilities Education Act,
    [$7,439,948,000] $8,425,595,000, of which [$2,090,452,000]
    $8,162,452,000 shall become available for obligation on July 1, [2001]
    2002, and shall remain available through September 30, [2002, and of
    which $5,072,000,000 shall become available on October 1, 2001 and shall
    remain available through September 30, 2002, for academic year 2001-
    2002] 2003: Provided, That [$9,500,000 shall be for Recording for the
    Blind and Dyslexic to support the development, production, and
    circulation of recorded educational materials: Provided further, That
    $1,500,000 shall be for the recipient of funds provided by Public Law
    105-78 under section 687(b)(2)(G) of the Act to provide information on
    diagnosis, intervention, and teaching strategies for children with
    disabilities: Provided further, That $7,353,000 of the funds for section
    672 of the Act shall be available for the projects and in the amounts
    specified in the statement of the managers on the conference report
    accompanying this Act] the budget authority (but not the outlays) for
    $5,072,000,000 provided under this heading in fiscal year 2001, to be
    available as an advance appropriation in fiscal year 2002, shall be
    considered direct spending in fiscal year 2002 for purposes of the
    Balanced Budget and Emergency Deficit Control Act of 1990, as amended,
    and section 2(a) of Public Law 106-554; Provided further, That the
    amount for section 611(c) of the Act shall be equal to the amount
    available for that section under Public Law 106-554, increased by the
    rate of inflation as specified in section 611(f)(1)(B)(ii) of the Act.
    (Department of Education Appropriations Act, 2001, as enacted by section
    1(a)(1) of P.L. 106-554.)

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-0300-0-1-501      2000 actual   2001 est.   2002 est.
    ----------------------------------------------------------------------------
        Direct program:
          Obligations by program activity:

            State grants:
    00.01     Grants to States..............       1,171       5,119      12,412
    00.02     Preschool grants..............         366         414         390
    00.03     Grants for infants and
                families....................         345         480         384
                                               ---------   ---------  ----------
    00.91       Subtotal, State grants......       1,882       6,013      13,186
            National activities:
    01.01     State improvement.............          32          79          49
    01.02     Research and innovation.......          65          78          70
    01.03     Technical assistance and
                dissemination...............          46          53          53
    01.04     Personnel preparation.........          82          81          82
    01.05     Parent information centers....          19          26          26
    01.06     Technology and media services.          36          39          32
                                               ---------   ---------  ----------
    01.91       Subtotal, National
                  activities................         280         356         312
                                               ---------   ---------  ----------
    02.00 Total Direct Program..............       2,162       6,369      13,498
    09.01 Reimbursable program..............           1
                                               ---------   ---------  ----------
    10.00 Total new obligations.............       2,163       6,369      13,498
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    21.40 Unobligated balance carried
            forward, start of year..........         119         259
    22.00 New budget authority (gross)......       2,295       6,110      13,498
    22.10 Resources available from
            recoveries of prior year
            obligations.....................           8
                                               ---------   ---------  ----------
    23.90   Total budgetary resources
              available for obligation......       2,422       6,369      13,498
    23.95 Total new obligations.............      -2,163      -6,369     -13,498
    23.98 Unobligated balance expiring or
            withdrawn.......................
    24.40 Unobligated balance carried
            forward, end of year............         259
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
          Discretionary:

    40.00   Appropriation...................       2,294       2,368       8,426
    55.00   Advance appropriation...........                   3,742
          Mandatory:

    65.00   Advance appropriation...........                               5,072
          Discretionary:

    68.00   Spending authority from
              offsetting collections:
              Offsetting collections (cash).           1
                                               ---------   ---------  ----------
    70.00   Total new budget authority
              (gross).......................       2,295       6,110      13,498
    ----------------------------------------------------------------------------

    [[Page 355]]

        Change in unpaid obligations:
          Unpaid obligations, start of year:

    72.40   Unpaid obligations, start of
              year..........................       6,855       4,044       4,598
                                               ---------   ---------  ----------
    72.99     Obligated balance, start of
                year........................       6,855       4,044       4,598
    73.10 Total new obligations.............       2,163       6,369      13,498
    73.20 Total outlays (gross).............      -4,950      -5,815      -6,933
    73.40 Adjustments in expired accounts
            (net)...........................         -15
    73.45 Recoveries of prior year
            obligations.....................          -8
          Unpaid obligations, end of year:

    74.40   Unpaid obligations, end of year.       4,044       4,598      11,163
                                               ---------   ---------  ----------
    74.99     Obligated balance, end of year       4,044       4,598      11,163
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.90 Outlays from new discretionary
            authority.......................         104       2,581       3,466
    86.93 Outlays from discretionary
            balances........................       4,846       3,234       3,468
                                               ---------   ---------  ----------
    87.00   Total outlays (gross)...........       4,950       5,815       6,933
    ----------------------------------------------------------------------------

        Offsets:
          Against gross budget authority and outlays:

    88.00   Offsetting collections (cash)
              from: Federal sources.........          -1
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................       2,294       6,110      13,498
    90.00 Outlays...........................       4,949       5,815       6,933
    ---------------------------------------------------------------------------

                            SUMMARY OF PROGRAM LEVEL

                            [In millions of dollars]

                                         2000-2001
                                          academic
                                            year      2001-2002
                                                    academic year 2002-2003
                                                                academic year
    Current Budget Authority............       2,294       2,368       8,426
    Advance appropriation...............       3,742       5,072
                                        ------------------------------------
        Total program level.............       6,036       7,440       8,426
                                        ====================================
    Change in advance appropriation from
    the previous year...................      +3,742      +1,330      -5,072

        The Administration proposes to reverse the misleading budget
    practice of using advance appropriations simply to avoid spending
    limitations. Accordingly, the amount requested to be appropriated for
    2002 is sufficient to provide normal funding and no advance
    appropriation for 2003 is requested. In order to avoid overstating
    discretionary budget authority in 2002, language is proposed to
    designate the advance appropriation budget authority amount as direct
    spending.

        State Grants:
            Grants to States.--Formula grants are provided to States to
        assist them in providing special education and related services to
        children with disabilities ages 3 through 21.
            Preschool grants.--Formula grants provide additional funds to
        States to further assist them in providing special education and
        related services to children with disabilities ages 3 through 5
        served under the Grants to States program.
            The goal of both of these programs is to improve results for
        children with disabilities by assisting State and local educational
        agencies to provide children with disabilities with access to high
        quality education that will help them meet challenging standards and
        prepare them for employment and independent living.
            Grants for infants and families.--Formula grants are provided to
        assist States to implement statewide systems of coordinated,
        comprehensive, multi-disciplinary interagency programs to provide
        early intervention services to children with disabilities, birth
        through age 2, and their families.
            The goal of this program is to help States provide a
        comprehensive system of early intervention services that will
        enhance family and child outcomes.

        National activities.--These activities include research,
    demonstration, personnel preparation, technical assistance, grants to
    States to promote systems change, and other activities to support State
    efforts to improve results for children with disabilities under the
    State grants programs.

        The goal of National activities is to link States, school systems,
    and families to best practices to improve results for infants, toddlers,
    and children with disabilities.

        Performance data related to these goals include:

                                             2000 actual   2001 est.   2002 est.
    Number of children served in first
        quarter of fiscal year:
      Ages 3 through 21.....................   6,270,000   6,377,000   6,466,000
      Ages 3 through 5......................     588,944     600,700     612,700
      Birth through 2.......................     205,525     214,800     244,500

                                        1996-1997 ac1997-1998 actual  1998-1999
                                                                          actual
        Educational Environment
    Percent of children ages 6 through 21
        provided special education in:
      Regular classrooms....................        45.7        46.5        47.4
      Resource rooms........................        28.5        29.1        28.4
      Separate classes......................        21.4        20.4        20.1
      Separate schools......................         3.1         2.8         2.9
      Residential facilities................          .7          .7          .7
      Home or hospital......................          .6          .5          .5
        Status of Exiting Students
    Percent of students with disabilities
        aged 14-21 leaving school:
      Graduated with a diploma..............        53.5        55.4        57.4
      Graduated through certification.......        11.4        11.2        11.2
      Dropped out of school.................        32.7        31.0        28.9
      Reached maximum age and other.........         2.4         2.4         2.5

                   Object Classification (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-0300-0-1-501      2000 actual   2001 est.   2002 est.
    ----------------------------------------------------------------------------
    25.2  Other services....................          10          20          17
    41.0  Grants, subsidies, and
            contributions...................       2,153       6,349      13,481
                                               ---------   ---------  ----------
    99.9    Total new obligations...........       2,163       6,369      13,498
    ---------------------------------------------------------------------------

                 Rehabilitation Services and Disability Research

        For carrying out, to the extent not otherwise provided, the
    Rehabilitation Act of 1973, the Assistive Technology Act of 1998, and
    the Helen Keller National Center Act, [$2,805,339,000] $2,930,117,000,
    of which $60,000,000 shall remain available through September 30, 2003:
    Provided, That the funds provided for title I of the Assistive
    Technology Act of 1998 (``the AT Act'') shall be allocated
    notwithstanding section 105(b)(1) of the AT Act: Provided further, That
    each State shall be provided $50,000 for activities under section 102 of
    the AT Act: Provided further, That [$15,000,000] $40,000,000 shall be
    used to support grants for up to three years to States under title III
    of the AT Act, of which the Federal share shall not exceed 75 percent in
    the first year, 50 percent in the second year, and 25 percent in the
    third year, and that the requirements in section 301(c)(2) and section
    302 of that Act shall not apply to such grants[: Provided further, That
    $4,600,000 of the funds for section 303 of the Rehabilitation Act of
    1973 shall be available for the projects and in the amounts specified in
    the statement of the managers on the conference report accompanying this
    Act: Provided further, That $400,000 of the funds for title II of the
    Rehabilitation Act of 1973 shall be for the Cerebral Palsy Research
    Foundation in Wichita, Kansas for the establishment of a Rehabilitation
    Research and Training Center to study and recommend incentives for
    employers to hire persons with significant disabilities]. (Department of
    Education Appropriations Act, 2001, as enacted by section 1(a)(1) of
    P.L. 106-554.)

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-0301-0-1-506      2000 actual   2001 est.   2002 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
          Direct program:

    00.01   Vocational rehabilitation State
              grants........................       2,339       2,400       2,481
    00.02   Client assistance State grants..          11          12          12
    00.03   Training........................          40          40          40
    00.04   Demonstration and training
              programs......................          22          21          16
    00.05   Migrant and seasonal farmworkers           2           2           2
    00.06   Recreational programs...........           3           3           3
    00.07   Protection and advocacy of
              individual rights.............          12          14          14
    00.08   Projects with industry..........          22          22          22
    00.09   Supported employment State
              grants........................          38          38          38
    00.10   Independent living..............          85         100         100
    00.11   Program improvement.............           2           2           1

    [[Page 356]]

    00.12   Evaluation......................           2           2           1
    00.13   Helen Keller National Center....           9           9           9
    00.14   National Institute on Disability
              and Rehabilitation Research...          86         100         110
    00.15   Assistive technology............          34          41          61
    00.16   Access to Telework Fund.........                                  20
                                               ---------   ---------  ----------
    01.00   Total direct program............       2,707       2,806       2,930
    09.01 Reimbursable program..............           2           2           2
                                               ---------   ---------  ----------
    10.00   Total new obligations...........       2,709       2,808       2,932
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    22.00 New budget authority (gross)......       2,709       2,808       2,932
    23.95 Total new obligations.............      -2,709      -2,808      -2,932
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
          Discretionary:

    40.00   Appropriation...................         369         406         449
    40.76   Reduction pursuant to P.L. 106-
              113...........................          -1
                                               ---------   ---------  ----------
    43.00     Appropriation (total
                discretionary)..............         368         406         449
          Mandatory:

    60.00   Appropriation...................       2,339       2,400       2,481
          Discretionary:

    68.00   Spending authority from
              offsetting collections:
              Offsetting collections (cash).           2           2           2
                                               ---------   ---------  ----------
    70.00   Total new budget authority
              (gross).......................       2,709       2,808       2,932
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
          Unpaid obligations, start of year:

    72.40   Unpaid obligations, start of
              year..........................       1,028         977         924
                                               ---------   ---------  ----------
    72.99     Obligated balance, start of
                year........................       1,028         977         924
    73.10 Total new obligations.............       2,709       2,808       2,932
    73.20 Total outlays (gross).............      -2,758      -2,861      -2,892
    73.40 Adjustments in expired accounts
            (net)...........................          -2
          Unpaid obligations, end of year:

    74.40   Unpaid obligations, end of year.         977         924         964
                                               ---------   ---------  ----------
    74.99     Obligated balance, end of year         977         924         964
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.90 Outlays from new discretionary
            authority.......................          66         285         315
    86.93 Outlays from discretionary
            balances........................         229         380         122
    86.97 Outlays from new mandatory
            authority.......................       1,843       1,680       1,737
    86.98 Outlays from mandatory balances...         620         516         718
                                               ---------   ---------  ----------
    87.00   Total outlays (gross)...........       2,758       2,861       2,892
    ----------------------------------------------------------------------------

        Offsets:
          Against gross budget authority and outlays:

    88.00   Offsetting collections (cash)
              from: Federal sources.........          -2          -2          -2
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................       2,707       2,806       2,930
    90.00 Outlays...........................       2,755       2,859       2,890
    ---------------------------------------------------------------------------

        Vocational rehabilitation State grants.--The basic State grants
    program provides Federal matching funds to State vocational
    rehabilitation (VR) agencies to assist individuals with physical or
    mental impairments to become gainfully employed. Services are tailored
    to the specific needs of the individual. Priority is given to serving
    those with the most significant disabilities. Current law requires that
    between 1.0 percent and 1.5 percent of the funds appropriated for the VR
    State grants program be set aside for Grants for Indians in 2002.

        The table below presents national data on selected performance
    measures for the VR State grants program. The data are based on the
    number of individuals whose service records were closed in fiscal years
    1998 (359,877) and 1999 (370,742). The 2002 target is to increase the
    number of individuals with disabilities achieving an employment outcome
    by one percent over the previous year and to increase the employment
    outcome rate to 63.2 percent.

                       CONSUMER OUTCOMES (CASES CLOSED)

                                              1998 actual     1999 actual
    Individuals achieving employment
     outcomes...............................       223,668         231,714
     Percent with significant disabilities..         82.6%           84.9%
    Employment outcomes as a percent all of
     individuals receiving services.........         62.2%           62.5%

        Client assistance State grants.--Formula grants are made to States
    to provide assistance in informing and advising clients and applicants
    of benefits available under the Rehabilitation Act and, if requested, to
    pursue legal or administrative remedies to ensure the protection of the
    rights of individuals with disabilities.

        Training.--Grants are made to States and public or nonprofit
    agencies and organizations, including institutions of higher education,
    to increase the number of skilled personnel available for employment in
    the field of rehabilitation and to upgrade the skills of those already
    employed.

        Demonstration and training programs.--Grants are made for programs
    that expand and improve the provision of rehabilitation services, or
    that further the purposes of the Rehabilitation Act.

        Migrant and seasonal farmworkers.--Grants are made to State VR
    agencies and other nonprofit or local agencies to provide comprehensive
    vocational rehabilitation services to migrant and seasonal farmworkers
    with disabilities.

        Recreational programs.--Grants are made to provide individuals with
    disabilities with recreational and related activities to aid in their
    employment, mobility, independence, socialization, and community
    integration.

        Protection and advocacy of individual rights.--Formula grants are
    made to State protection and advocacy systems to protect the legal and
    human rights of individuals with disabilities.

        Projects with industry (PWI).--Grants are made to a variety of
    public and private organizations to facilitate the establishment of
    partnerships between rehabilitation service providers and business and
    industry in order to create and expand employment and career advancement
    opportunities for individuals with disabilities. In 2000, PWI projects
    placed in competitive employment approximately 61.9 percent (8,104) of
    the 13,083 individuals with disabilities served by the 99 projects. The
    2002 target for this program is to place 62.2 percent of the individuals
    served in competitive employment.

        Supported employment State grants.--Formula grants are made to
    assist States in developing programs with public and nonprofit
    organizations to provide supported employment services for individuals
    with the most significant disabilities who require on-going support
    services to enter or retain competitive employment. In 1999, 73 percent
    of individuals with a supported employment goal achieved a competitive
    employment outcome.

        Independent living.--Grants are awarded to States and nonprofit
    agencies to assist individuals with significant disabilities in their
    achievement of self-determined independent living goals. Grants are also
    awarded to provide support services to older blind individuals to
    increase their ability to care for their own needs. Performance
    indicators focus on customer satisfaction, achievement of individual
    goals, and broader systemic reforms in the community.

        Program improvement.--Funds are used to promote broad-based planning
    and coordination, improve accountability, and enhance the Department's
    ability to address critical areas of national significance in achieving
    the goals of the Rehabilitation Act. Examples of program improvement
    activities include technical assistance, dissemination, and performance
    measurement activities.

    [[Page 357]]

        Evaluation.--Studies are conducted to evaluate the impact and
    effectiveness of various programs authorized under the Rehabilitation
    Act. The multi-year national longitudinal study of the Vocational
    Rehabilitation State grants program is scheduled for completion in 2001.
    Expanded study findings on employment retention will be available in
    2002.

        Helen Keller National Center for Deaf-Blind Youths and Adults.--The
    Center provides services to deaf-blind youths and adults and provides
    training and technical assistance to professional and allied personnel
    at its national headquarters center and through its regional
    representatives and affiliate agencies.

        National Institute on Disability and Rehabilitation Research.--The
    Institute carries out a comprehensive and coordinated program of
    rehabilitation research and related activities. Through grants and
    contracts, it supports the conduct and dissemination of research aimed
    at improving the lives of individuals with disabilities. The Institute
    also promotes the development and utilization of new technologies to
    assist these individuals in achieving greater independence and
    integration into society.

        Assistive technology.--Activities include the Assistive Technology
    State grant program, protection and advocacy services, and technical
    assistance designed to develop and implement consumer-responsive
    comprehensive statewide programs of technology-related assistance for
    individuals with disabilities. Grants also are made to States to
    establish alternative financing programs to increase access to assistive
    technology for individuals with disabilities.

        Access to telework fund.--Under this new program, Federal matching
    funds would be awarded to States to provide loans for individuals with
    disabilities to purchase computers and other equipment so that they can
    telework from home.

                   Object Classification (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-0301-0-1-506      2000 actual   2001 est.   2002 est.
    ----------------------------------------------------------------------------

          Direct obligations:

    25.1    Advisory and assistance services           7           7          10
    25.2    Other services..................           2           2           2
    25.3    Purchases of goods and services
              from Government accounts......                       1           1
    25.5    Research and development
              contracts.....................           1           1           5
    41.0    Grants, subsidies, and
              contributions.................       2,697       2,795       2,912
                                               ---------   ---------  ----------
    99.0      Subtotal, direct obligations..       2,707       2,806       2,930
    99.0  Reimbursable obligations..........           2           2           2
                                               ---------   ---------  ----------
    99.9    Total new obligations...........       2,709       2,808       2,932
    ---------------------------------------------------------------------------

               Special Institutions for Persons With Disabilities

                      american printing house for the blind

        For carrying out the Act of March 3, 1879, as amended (20 U.S.C. 101
    et seq.), $12,000,000. (Department of Education Appropriations Act,
    2001, as enacted by section 1(a)(1) of P.L. 106-554.)

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-0600-0-1-501      2000 actual   2001 est.   2002 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
    10.00 Total new obligations (object
            class 41.0).....................          10          12          12
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    22.00 New budget authority (gross)......          10          12          12
    23.95 Total new obligations.............         -10         -12         -12
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
          Discretionary:

    40.00   Appropriation...................          10          12          12
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
          Unpaid obligations, start of year:

    72.40   Unpaid obligations, start of
              year..........................           3           4           1
                                               ---------   ---------  ----------
    72.99     Obligated balance, start of
                year........................           3           4           1
    73.10 Total new obligations.............          10          12          12
    73.20 Total outlays (gross).............          -9         -15         -12
          Unpaid obligations, end of year:

    74.40   Unpaid obligations, end of year.           4           1           1
                                               ---------   ---------  ----------
    74.99     Obligated balance, end of year           4           1           1
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.90 Outlays from new discretionary
            authority.......................           7          11          11
    86.93 Outlays from discretionary
            balances........................           3           4           1
                                               ---------   ---------  ----------
    87.00   Total outlays (gross)...........           9          15          12
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................          10          12          12
    90.00 Outlays...........................           9          15          12
    ---------------------------------------------------------------------------

        The Federal appropriation supports the production of free
    educational materials for students below the college level who are
    blind, research related to developing and improving products, and
    advisory services to consumer organizations on the availability and use
    of materials. In 2000, the portion of the Federal appropriation
    allocated to educational materials represented approximately 49.2
    percent of the Printing House's total sales. The full appropriation
    represented approximately 37.4 percent of the Printing House's total
    budget.

                    national technical institute for the deaf

        For the National Technical Institute for the Deaf under titles I and
    II of the Education of the Deaf Act of 1986 (20 U.S.C. 4301 et seq.),
    [$53,376,000] $52,570,000, of which [$5,376,000] $4,570,000 shall be for
    construction and shall remain available until expended: Provided, That
    from the total amount available, the Institute may at its discretion use
    funds for the endowment program as authorized under section 207.
    (Department of Education Appropriations Act, 2001, as enacted by section
    1(a)(1) of P.L. 106-554.)

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-0601-0-1-502      2000 actual   2001 est.   2002 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
    00.01 Operations........................          45          48          48
    00.02 Construction......................           3           5           5
                                               ---------   ---------  ----------
    10.00   Total new obligations (object
              class 41.0)...................          48          53          53
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    22.00 New budget authority (gross)......          48          53          53
    23.95 Total new obligations.............         -48         -53         -53
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
          Discretionary:

    40.00   Appropriation...................          48          53          53
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
          Unpaid obligations, start of year:

    72.40   Unpaid obligations, start of
              year..........................           1           5           9
                                               ---------   ---------  ----------
    72.99     Obligated balance, start of
                year........................           1           5           9
    73.10 Total new obligations.............          48          53          53
    73.20 Total outlays (gross).............         -44         -49         -51
          Unpaid obligations, end of year:

    74.40   Unpaid obligations, end of year.           5           9          11
                                               ---------   ---------  ----------
    74.99     Obligated balance, end of year           5           9          11
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.90 Outlays from new discretionary
            authority.......................          46          46          46
    86.93 Outlays from discretionary
            balances........................          -2           3           5
                                               ---------   ---------  ----------
    87.00   Total outlays (gross)...........          44          49          51
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................          48          53          53
    90.00 Outlays...........................          44          49          51
    ---------------------------------------------------------------------------

        This residential program provides postsecondary technical and
    professional education for people who are deaf to prepare

    [[Page 358]]

    them for employment, provides training, and conducts applied research
    into employment related aspects of deafness. In 2000, Federal
    appropriations represented 81 percent of the Institute's operating
    budget. The Institute may use appropriated funds for the Endowment Grant
    program. The request also includes funds for the third and final phase
    of a construction project to renovate the Institute's dormitories.

                              gallaudet university

        For the Kendall Demonstration Elementary School, the Model Secondary
    School for the Deaf, and the partial support of Gallaudet University
    under titles I and II of the Education of the Deaf Act of 1986 (20
    U.S.C. 4301 et seq.), $89,400,000: Provided, That from the total amount
    available, the University may at its discretion use funds for the
    endowment program as authorized under section 207. (Department of
    Education Appropriations Act, 2001, as enacted by section 1(a)(1) of
    P.L. 106-554.)

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-0602-0-1-502      2000 actual   2001 est.   2002 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
    00.01 Operations........................          83          89          89
    00.02 Construction......................           3
                                               ---------   ---------  ----------
    10.00   Total new obligations (object
              class 41.0)...................          86          89          89
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    22.00 New budget authority (gross)......          86          89          89
    23.95 Total new obligations.............         -86         -89         -89
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
          Discretionary:

    40.00   Appropriation...................          86          89          89
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
          Unpaid obligations, start of year:

    72.40   Unpaid obligations, start of
              year..........................           3           8           5
                                               ---------   ---------  ----------
    72.99     Obligated balance, start of
                year........................           3           8           5
    73.10 Total new obligations.............          86          89          89
    73.20 Total outlays (gross).............         -81         -92         -89
          Unpaid obligations, end of year:

    74.40   Unpaid obligations, end of year.           8           5           5
                                               ---------   ---------  ----------
    74.99     Obligated balance, end of year           8           5           5
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.90 Outlays from new discretionary
            authority.......................          86          84          84
    86.93 Outlays from discretionary
            balances........................          -5           8           5
                                               ---------   ---------  ----------
    87.00   Total outlays (gross)...........          81          92          89
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................          86          89          89
    90.00 Outlays...........................          81          92          89
    ---------------------------------------------------------------------------

        This institution provides undergraduate and continuing education
    programs for persons who are deaf, and graduate programs related to
    deafness for students who are deaf and students who are hearing. The
    University also conducts basic and applied research and provides public
    service programs for persons who are deaf and persons who work with
    them.

        Gallaudet operates two elementary and secondary education programs
    on the main campus of the University. The Kendall Demonstration
    Elementary School serves students who are deaf from infancy through age
    15, and the Model Secondary School for the Deaf serves high school age
    students who are deaf. Both schools also develop and disseminate
    information on effective educational techniques and strategies for
    teachers and professionals working with students who are deaf or hard of
    hearing.

        In 2000, the Federal appropriation represented 63 percent of the
    University's operating budget, excluding Federal financial aid,
    vocational rehabilitation, and competitive grants and contracts, and
    97.9 percent of the operating budgets of the related elementary and
    secondary schools. The University may also use appropriated funds for
    the Endowment Grant program.

                    OFFICE OF VOCATIONAL AND ADULT EDUCATION

                                  Federal Funds

    General and special funds:

                         Vocational and Adult Education

        For carrying out, to the extent not otherwise provided, the Carl D.
    Perkins Vocational and Technical Education Act, the Adult Education and
    Family Literacy Act, and title VIII-D of the Higher Education Act of
    1965, as amended, and Public Law 102-73, [$1,825,600,000, of which
    $1,000,000 shall remain available until expended, and] $1,801,660,000,
    of which [$1,028,000,000] $1,796,060,000 shall become available on July
    1, [2001] 2002 and shall remain available through September 30, [2002
    and of which $791,000,000 shall become available on October 1, 2001 and
    shall remain available through September 30, 2002] 2003: Provided, That
    the budget authority (but not the outlays) for $791,000,000 provided
    under this heading in fiscal year 2001, to be available as an advance
    appropriation in fiscal year 2002, shall be considered direct spending
    in fiscal year 2002 for purposes of the Balanced Budget and Emergency
    Deficit Control Act of 1990, as amended, and section 2(a) of Public Law
    106-554: [of the amounts made available for the Carl D. Perkins
    Vocational and Technical Education Act, $5,600,000 shall be for tribally
    controlled postsecondary vocational and technical institutions under
    section 117: Provided further, That $9,000,000 shall be for carrying out
    section 118 of such Act: Provided further, That of the amounts made
    available for the Carl D. Perkins Vocational and Technical Education
    Act, $5,000,000 shall be for demonstration activities authorized by
    section 207:] Provided further, That of the amount provided for Adult
    Education State Grants, $70,000,000 shall be made available for
    integrated English literacy and civics education services to immigrants
    and other limited English proficient populations: Provided further, That
    of the amount reserved for integrated English literacy and civics
    education, notwithstanding section 211 of the Adult Education and Family
    Literacy Act, 65 percent shall be allocated to States based on a State's
    absolute need as determined by calculating each State's share of a 10-
    year average of the Immigration and Naturalization Service data for
    immigrants admitted for legal permanent residence for the 10 most recent
    years, and 35 percent allocated to States that experienced growth as
    measured by the average of the 3 most recent years for which Immigration
    and Naturalization Service data for immigrants admitted for legal
    permanent residence are available, except that no State shall be
    allocated an amount less than $60,000: Provided further, That of the
    amounts made available for the Adult Education and Family Literacy Act,
    [$14,000,000] $9,500,000 shall be for national leadership activities
    under section 243 and [$6,500,000] $6,560,000 shall be for the National
    Institute for Literacy under section 242: Provided further, That
    $22,000,000 shall be for Youth Offender Grants, of which $5,000,000
    shall be used in accordance with section 601 of Public Law 102-73 as
    that section was in effect prior to the enactment of Public Law 105-220:
    Provided further, That of the amounts made available for title I of the
    Perkins Act, the Secretary may reserve up to 0.54 percent for incentive
    grants under section 503 of the Workforce Investment Act, without regard
    to section 111(a)(1)(C) of the Perkins Act: Provided further, That of
    the amounts made available for the Adult Education and Family Literacy
    Act, the Secretary may reserve up to 1.72 percent for incentive grants
    under section 503 of the Workforce Investment Act, without regard to
    section 211(a)(3) of the Adult Education and Family Literacy Act.
    (Department of Education Appropriations Act, 2001, as enacted by section
    1(a)(1) of P.L. 106-554.)

    [[Page 359]]

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-0400-0-1-501      2000 actual   2001 est.   2002 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
          Vocational education:

            Annual appropriations:
              Vocational education:
    00.01       Basic grants................         257       1,095       1,795
    00.02       National programs...........          15          17          17
    00.03       Occupational and employment
                  information...............           8          10
    00.04       Tribally controlled
                  postsecondary vocational
                  institutions..............           4           5           6
    00.05       Tech-prep education.........         103         106         106
    00.06     Tech-prep demonstration.......                       5
                                               ---------   ---------  ----------
    00.91       Total, Vocational education.         387       1,238       1,924
              Adult education:
    01.01       State grants................         443         538         550
    01.02       National Institute for
                  Literacy..................           6           6           7
    01.03       National leadership
                  activities................          14          14          14
                                               ---------   ---------  ----------
    01.91       Total, adult education......         463         558         570
    02.01     State grants for incarcerated
                youth offenders.............          14          17          17
    03.01     Literacy programs for
                prisoners...................                       6           5
    09.01 Reimbursable program..............           2
                                               ---------   ---------  ----------
    10.00   Total new obligations...........         866       1,819       2,516
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    21.40 Unobligated balance carried
            forward, start of year..........          60          86          93
    22.00 New budget authority (gross)......         893       1,826       2,593
                                               ---------   ---------  ----------
    23.90   Total budgetary resources
              available for obligation......         953       1,911       2,686
    23.95 Total new obligations.............        -866      -1,819      -2,516
    24.40 Unobligated balance carried
            forward, end of year............          86          93         169
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
          Discretionary:

    40.00   Appropriation...................         891       1,035       1,802
    55.00   Advance appropriation...........                     791
          Mandatory:

    65.00   Advance appropriation...........                                 791
          Discretionary:

    68.00   Spending authority from
              offsetting collections:
              Offsetting collections (cash).           2
                                               ---------   ---------  ----------
    70.00   Total new budget authority
              (gross).......................         893       1,826       2,593
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
          Unpaid obligations, start of year:

    72.40   Unpaid obligations, start of
              year..........................       1,939       1,334       1,430
                                               ---------   ---------  ----------
    72.99     Obligated balance, start of
                year........................       1,939       1,334       1,430
    73.10 Total new obligations.............         866       1,819       2,516
    73.20 Total outlays (gross).............      -1,465      -1,723      -1,774
    73.40 Adjustments in expired accounts
            (net)...........................          -6
          Unpaid obligations, end of year:

    74.40   Unpaid obligations, end of year.       1,334       1,430       2,172
                                               ---------   ---------  ----------
    74.99     Obligated balance, end of year       1,334       1,430       2,172
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.90 Outlays from new discretionary
            authority.......................          34         646         645
    86.93 Outlays from discretionary
            balances........................       1,430       1,077       1,130
                                               ---------   ---------  ----------
    87.00   Total outlays (gross)...........       1,465       1,723       1,774
    ----------------------------------------------------------------------------

        Offsets:
          Against gross budget authority and outlays:

    88.40   Offsetting collections (cash)
              from: Non-Federal sources.....          -2
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................         891       1,826       2,593
    90.00 Outlays...........................       1,463       1,723       1,774
    ---------------------------------------------------------------------------

        Program levels for activities in this account are as follows:

                            (in millions of dollars)

                                         2000-2001
                                          academic
                                            year      2001-2002
                                                    academic year 2002-2003
                                                                academic year
    1. Vocational education:
      a. Basic grants:
        Annual appropriation............         265         309       1,100
        Advance appropriation...........         791         791
                                        ------------------------------------
          Subtotal, basic grants........       1,056       1,100       1,100
      b. National programs..............          18          18          12
      c. Occupational & employment
        information.....................           9           9
      d. Tribally controlled
        postsecondary vocational
        institutions....................           5           6           6
      e. Tech-prep education............         106         106         106
      f. Tech-prep demonstration........                       5
          Total, vocational education...       1,194       1,244       1,224
    2. Adult education:
      a. State grants...................         450         540         540
      b. National Institute for Literacy           6           7           7
      c. National leadership activities.          14          14          10
                                        ------------------------------------
          Total, adult education........         470         561         557
    3. State grants for incarcerated
    youth offenders.....................          14          17          17
    4. Literacy programs for prisoners..           5           5           5
                                        ------------------------------------
          Total.........................       1,683       1,827       1,803
                                        ====================================

                            SUMMARY OF PROGRAM LEVEL

                            (in millions of dollars)

                                         2000-2001
                                          academic
                                            year      2001-2002
                                                    academic year 2002-2003
                                                                academic year
    New Budget Authority................         891       1,035       1,802
    Advance appropriation...............         791         791
                                        ------------------------------------
        Total program level.............       1,682       1,826       1,802
                                        ====================================
    Change in advance appropriation from
    the previous year...................        +791                    -791

        The Administration proposes to reverse the misleading budget
    practice of using advance appropriations simply to avoid spending
    limitations. Accordingly, the amount requested to be appropriated for
    2002 is sufficient to provide normal funding and no advance
    appropriation for 2003 is requested. In order to avoid overstating
    discretionary budget authority in 2002, language is proposed to
    designate the advance appropriation budget authority amount as direct
    spending.

        Vocational education.--
            Basic grants.--Formula grants provide funds to States and
        localities to expand and improve their programs of vocational
        education and promote equal opportunity in vocational education
        programs for historically underserved populations. Funds under the
        Indian program are awarded to federally recognized Indian tribes and
        are in addition to services provided under other provisions of the
        Perkins Act. Funds under the Hawaiian Natives program are awarded to
        organizations primarily serving and representing Hawaiian Natives.
        Funds under the Territorial set-aside support the expansion and
        improvement of vocational education programs in American Samoa,
        Guam, the Northern Marianas, and the Freely Associated States.
            National programs.--Funds are awarded on a competitive basis for
        activities that contribute to knowledge of how to improve vocational
        education nationally. Activities include two national centers for
        research and dissemination in vocational education and a program of
        discretionary research and development projects.
            Tribally controlled postsecondary vocational and technical
        institutions.--Grants support the operation and improvement of
        tribally controlled postsecondary vocational institutions, to ensure
        continued and expanded educational opportunities for Indian
        students.
            Tech-prep education.--Formula grants to States support planning
        and demonstration grants to consortia of local educational agencies
        and postsecondary institutions to develop and operate model 4-year
        programs. Programs begin in high school and provide students with
        the mathematical, scientific, communications, and technological
        skills needed to earn a 2-year associate degree or a 2-year
        certificate in a specific occupational field.

        Adult education.--
            State programs.--Formula grants are made to States to help
        eliminate functional illiteracy among the Nation's

    [[Page 360]]

        adults, to assist adults in obtaining a high school diploma or its
        equivalent, and to promote family literacy. A portion of the funds
        are reserved for formula grants to States to provide English
        literacy and civics education for immigrants and other limited
        English proficient adults.
            National Institute for Literacy.--Funds support the Institute's
        national leadership activities to improve and expand the Nation's
        system for delivery of literacy services.
            National leadership activities.--Funds support discretionary
        activities to evaluate the effectiveness of Federal, State, and
        local adult education programs and to test and demonstrate methods
        of improving program quality.
            State grants for incarcerated youth offenders.--Formula grants
        are made to State correctional agencies to assist and encourage
        incarcerated youths to acquire functional literacy skills and life
        and job skills.
            Literacy programs for prisoners.--Funds are awarded on a
        competitive basis to State and local correctional agencies to
        establish and operate programs that reduce recidivism.

                   Object Classification (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-0400-0-1-501      2000 actual   2001 est.   2002 est.
    ----------------------------------------------------------------------------

          Direct obligations:

            Personnel compensation:
    11.1      Full-time permanent...........                       1
    11.3      Other than full-time permanent           1           1           1
                                               ---------   ---------  ----------
    11.9        Total personnel compensation           1           2           1
    25.1    Advisory and assistance services           5           6           6
    25.2    Other services..................           3           3           3
    25.3    Purchases of goods and services
              from Government accounts......           1           1           1
    25.5    Research and development
              contracts.....................           7           8           8
    41.0    Grants, subsidies, and
              contributions.................         845       1,797       2,495
                                               ---------   ---------  ----------
    99.0      Subtotal, direct obligations..         862       1,817       2,514
    99.0  Reimbursable obligations..........           2
    99.5  Below reporting threshold.........           2           2           2
                                               ---------   ---------  ----------
    99.9    Total new obligations...........         866       1,819       2,516
    ---------------------------------------------------------------------------

                                  Personnel Summary

    ----------------------------------------------------------------------------
    Identification code 91-0400-0-1-501      2000 actual   2001 est.   2002 est.
    ----------------------------------------------------------------------------
    1001  Total compensable workyears: Full-
            time equivalent employment......          15          20          16
    ---------------------------------------------------------------------------

                        OFFICE OF POSTSECONDARY EDUCATION

                                  Federal Funds

    General and special funds:

                                Higher Education

        For carrying out, to the extent not otherwise provided, section 121
    and titles II, III, IV, V, VI, and VII of the Higher Education Act of
    1965, as amended, [section 1543 of the Higher Education Amendments of
    1992 and title VIII of the Higher Education Amendments of 1998,] and the
    Mutual Educational and Cultural Exchange Act of 1961, [$1,911,710,000]
    $1,723,223,000, of which [$10,000,000] $5,000,000 for interest subsidies
    authorized by section 121 of the Higher Education Act of 1965, shall
    remain available until expended: Provided, That $10,000,000, to remain
    available through September 30, [2002] 2003, shall be available to fund
    fellowships for academic year [2002-2003] 2003-2004 under part A,
    subpart 1 of title VII of said Act, under the terms and conditions of
    part A, subpart 1: Provided further, That [$3,000,000] $1,000,000 is for
    data collection and evaluation activities for programs under the Higher
    Education Act of 1965, including such activities needed to comply with
    the Government Performance and Results Act of 1993: [Provided further,
    That $15,000,000 shall be available for tribally controlled colleges and
    universities under section 316 of the Higher Education Act of 1965, of
    which $5,000,000 shall be used for construction and renovation: Provided
    further, That $250,000 shall be for the Web-Based Education Commission
    to continue activities authorized under part J of title VIII of the
    Higher Education Amendments of 1998: Provided further, That $115,487,000
    of the funds for part B of title VII of the Higher Education Act of 1965
    shall be available for the projects and in the amounts specified in the
    statement of the managers on the conference report accompanying this
    Act: Provided further, That the funds provided for title II of the
    Higher Education Act of 1965 shall be allocated notwithstanding section
    210 of the Higher Education Act of 1965 and that up to 1.4 percent of
    the total funds made available under section 210 of the Higher Education
    Act of 1965 may be used to carry out the evaluation activities
    authorized under section 206(d) of that Act] Provided further, That
    funds for part B of title VII of the Higher Education Act of 1965 may be
    used, at the discretion of the Secretary of Education, to fund
    continuation awards under title IV, part A, subpart 8 of such Act.
    (Department of Education Appropriations Act, 2001, as enacted by section
    1(a)(1) of P.L. 106-554.)

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-0201-0-1-502      2000 actual   2001 est.   2002 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
          Aid for institutional development:

    00.01   Strengthening institutions......          60          73          73
    00.02   Strengthening tribally
              controlled colleges and
              universities..................           6          15          15
    00.03   Strengthening Alaska Native and
              Native Hawaiian-serving
              institutions..................           5           6           6
    00.04   Strengthening historically black
              colleges and universities.....         149         185         197
    00.05   Strengthening historically black
              graduate institutions.........          31          45          48
    00.06   Minority science and engineering
              improvement...................           8           8           8
                                               ---------   ---------  ----------
    00.91     Subtotal, aid for
                institutional development...         259         332         347
          Other aid for institutions:

    01.01   Developing Hispanic-serving
              institutions..................          42          69          73
    01.02   International education and
              foreign language studies......          70          78          78
    01.03   Fund for the Improvement of
              Postsecondary Education.......          71         151          51
    01.04   Demonstration projects to ensure
              quality higher education for
              students with disabilities....           5           6
    01.05   Interest subsidy grants.........          11          18           5
                                               ---------   ---------  ----------
    01.91     Subtotal, other aid for
                institutions................         199         322         207
          Assistance for students:

    02.01   Federal TRIO programs...........         645         730         780
    02.02   Gaining early awareness and
              readiness for undergraduate
              programs (GEAR UP)............         200         295         227
    02.03   Byrd honors scholarships........          40          41          41
    02.04   Javits fellowships..............          10          10          10
    02.05   Graduate assistance in areas of
              national need.................          31          31          31
    02.06   Thurgood Marshall legal
              educational program...........                       4
    02.07   B. J. Stupak Olympic
              scholarships..................                       1
    02.08   Child care access means parents
              in school.....................           5          25          25
    02.09   Learning anytime anywhere
              partnerships..................          23          30
    02.10   State grants for incarcerated
              youth offenders...............           5
                                               ---------   ---------  ----------
    02.91     Subtotal, assistance for
                students....................         959       1,167       1,114
          Other Aid:

    03.01   Teacher quality enhancement.....          98          98          54
    03.02   GPRA data/HEA program evaluation           3           3           1
    03.03   Underground railroad program....           2           2
    03.04   Community scholarship
              mobilization..................           1
                                               ---------   ---------  ----------
    03.91     Subtotal, Other Aid...........         104         103          55
    09.01 Reimbursable program..............           8
                                               ---------   ---------  ----------
    10.00   Total new obligations...........       1,529       1,924       1,723
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    21.40 Unobligated balance carried
            forward, start of year..........          12          22          10
    22.00 New budget authority (gross)......       1,538       1,912       1,723
                                               ---------   ---------  ----------
    23.90   Total budgetary resources
              available for obligation......       1,550       1,934       1,733
    23.95 Total new obligations.............      -1,529      -1,924      -1,723
    24.40 Unobligated balance carried
            forward, end of year............          22          10          10
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
          Discretionary:

    40.00   Appropriation...................       1,534       1,912       1,723

    [[Page 361]]

    40.76   Reduction pursuant to P.L. 106-
              113...........................          -4
                                               ---------   ---------  ----------
    43.00     Appropriation (total
                discretionary)..............       1,530       1,912       1,723
    68.00 Spending authority from offsetting
            collections: Offsetting
            collections (cash)..............           8
                                               ---------   ---------  ----------
    70.00   Total new budget authority
              (gross).......................       1,538       1,912       1,723
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
          Unpaid obligations, start of year:

    72.40   Unpaid obligations, start of
              year..........................       1,533       1,963       2,329
                                               ---------   ---------  ----------
    72.99     Obligated balance, start of
                year........................       1,533       1,963       2,329
    73.10 Total new obligations.............       1,529       1,924       1,723
    73.20 Total outlays (gross).............      -1,098      -1,559      -1,777
          Unpaid obligations, end of year:

    74.40   Unpaid obligations, end of year.       1,963       2,329       2,275
                                               ---------   ---------  ----------
    74.99     Obligated balance, end of year       1,963       2,329       2,275
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.90 Outlays from new discretionary
            authority.......................          77         104          90
    86.93 Outlays from discretionary
            balances........................       1,022       1,455       1,687
                                               ---------   ---------  ----------
    87.00   Total outlays (gross)...........       1,098       1,559       1,777
    ----------------------------------------------------------------------------

        Offsets:
          Against gross budget authority and outlays:

    88.40   Offsetting collections (cash)
              from: Non-Federal sources.....          -8
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................       1,530       1,912       1,723
    90.00 Outlays...........................       1,090       1,559       1,777
    ---------------------------------------------------------------------------

        Aid for institutional development.--

        Strengthening institutions.--Funds will support planning and
    development grants for improving academic programs and financial
    management at schools that enroll high proportions of disadvantaged
    students and have low per-student expenditures.

        Strengthening tribally controlled colleges and universities.--Funds
    will support grants to American Indian tribally controlled colleges and
    universities with scarce resources to enable them to improve and expand
    their capacity to serve Indian students.

        Strengthening Alaska Native and Native Hawaiian-serving
    institutions.--Funds will support Alaska Native and Native Hawaiian-
    serving institutions to enable them to improve and expand their capacity
    to serve Alaska Native and Native Hawaiian students.

        Strengthening historically black colleges and universities.--Funds
    will support grants to help historically black undergraduate
    institutions to improve and expand their capacity to serve students, and
    to strengthen management and fiscal operations.

        Strengthening historically black graduate institutions.--Funds will
    support grants to help historically black graduate institutions to
    improve and expand their capacity to serve students, and to strengthen
    management and fiscal operations.

        Minority science and engineering improvement.--Funds will support
    grants to predominantly minority institutions to help them make long-
    range improvements in science and engineering education and to increase
    the participation of minorities in scientific and technological careers.

        Other aid for institutions.--

        Developing Hispanic-serving institutions.--Funds will support
    Hispanic-serving institutions to enable them to improve and expand their
    capacity to serve students.

        International education and foreign language studies programs.--
    Funds will promote the development and improvement of international and
    foreign language programs.

        Fund for the improvement of postsecondary education.--Funds will
    support a broad range of postsecondary reform and improvement projects,
    as well as international consortia programs.

        Interest subsidy grants.--Funds will meet mandatory interest subsidy
    costs of construction loan commitments made prior to 1974.

        Assistance for students.--

        Federal TRIO programs.--Funds will support postsecondary education
    outreach and student support services through 5 major programs designed
    to help individuals from disadvantaged backgrounds enter and complete
    college and graduate studies.

        Gaining early awareness and readiness for undergraduate programs.--
    Funds will support early college preparation and awareness activities at
    the State and local levels to ensure that low-income elementary and
    secondary school students are prepared for and pursue postsecondary
    education.

        Byrd honors scholarships.--Funds will support merit-based
    scholarships to students who have demonstrated outstanding academic
    achievement and who show promise of continued academic excellence for
    study at an institution of higher education.

        Javits fellowships.--Funds will support fellowships to students of
    superior ability who have financial need and who are pursuing doctoral
    degrees in the arts, humanities, and social sciences.

        Graduate assistance in areas of national need.--Funds will support
    fellowships to graduate students of superior ability who have financial
    need and who are from traditionally under-Prepresented backgrounds for
    study in areas of national need.

        Child care access means parents in school.--Funds will support a
    program designed to bolster the participation of low-income parents in
    postsecondary education through the provision of campus-based child care
    services.

        Other aid.--

        Teacher quality enhancement.--Funds will support programs that seek
    to make lasting changes in the ways our Nation recruits, prepares,
    licenses, and supports teachers.

        GPRA data/HEA program evaluation.--Funds will support data
    collection and evaluation activities for programs under the Higher
    Education Act of 1965, including such activities needed to comply with
    the Government Performance and Results Act of 1993.

                   Object Classification (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-0201-0-1-502      2000 actual   2001 est.   2002 est.
    ----------------------------------------------------------------------------

          Direct obligations:

    25.1    Advisory and assistance services           5           6           5
    25.2    Other services..................           6           7           4
    25.3    Purchases of goods and services
              from Government accounts......           1           2           2
    41.0    Grants, subsidies, and
              contributions.................       1,508       1,909       1,712
                                               ---------   ---------  ----------
    99.0      Subtotal, direct obligations..       1,520       1,924       1,723
    99.0  Reimbursable obligations..........           8
    99.5  Below reporting threshold.........           1
                                               ---------   ---------  ----------
    99.9    Total new obligations...........       1,529       1,924       1,723
    ---------------------------------------------------------------------------

                                Howard University

        For partial support of Howard University (20 U.S.C. 121 et seq.),
    $232,474,000, of which not less than $3,600,000 shall be for a matching
    endowment grant pursuant to the Howard University Endowment Act (Public
    Law 98-480) and shall remain available until expended. (Department of
    Education Appropriations Act, 2001, as enacted by section 1(a)(1) of
    P.L. 106-554.)

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-0603-0-1-502      2000 actual   2001 est.   2002 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
    00.01 General support...................         193         202         202
    00.02 Howard University Hospital........          30          30          30
                                               ---------   ---------  ----------

    [[Page 362]]

    10.00   Total new obligations (object
              class 41.0)...................         223         232         232
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    21.40 Unobligated balance carried
            forward, start of year..........           4
    22.00 New budget authority (gross)......         219         232         232
                                               ---------   ---------  ----------
    23.90   Total budgetary resources
              available for obligation......         223         232         232
    23.95 Total new obligations.............        -223        -232        -232
    24.40 Unobligated balance carried
            forward, end of year............
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
          Discretionary:

    40.00   Appropriation...................         219         232         232
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
          Unpaid obligations, start of year:

    72.40   Unpaid obligations, start of
              year..........................           1          14          14
                                               ---------   ---------  ----------
    72.99     Obligated balance, start of
                year........................           1          14          14
    73.10 Total new obligations.............         223         232         232
    73.20 Total outlays (gross).............        -210        -232        -232
          Unpaid obligations, end of year:

    74.40   Unpaid obligations, end of year.          14          14          14
                                               ---------   ---------  ----------
    74.99     Obligated balance, end of year          14          14          14
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.90 Outlays from new discretionary
            authority.......................         209         218         218
    86.93 Outlays from discretionary
            balances........................           1          14          14
                                               ---------   ---------  ----------
    87.00   Total outlays (gross)...........         210         232         232
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................         219         232         232
    90.00 Outlays...........................         210         232         232
    ---------------------------------------------------------------------------

        Howard University is a private, nonprofit educational institution
    consisting of 12 schools and colleges. Federal funds are used to provide
    partial support for university programs as well as for the teaching
    hospital facilities. In 2000, direct Federal appropriations for general
    support represented approximately 53 percent of the university's
    educational and general expenditures.

              College Housing and Academic Facilities Loans Program

        For Federal administrative expenses authorized under section 121 of
    the Higher Education Act of 1965, $762,000 to carry out activities
    related to existing facility loans entered into under the Higher
    Education Act of 1965. (Department of Education Appropriations Act,
    2001, as enacted by section 1(a)(1) of P.L. 106-554.)

      Historically Black College and University Capital Financing Program
                                     Account

        The total amount of bonds insured pursuant to section 344 of title
    III, part D of the Higher Education Act of 1965 shall not exceed
    $357,000,000, and the cost, as defined in section 502 of the
    Congressional Budget Act of 1974, of such bonds shall not exceed zero.
        For administrative expenses to carry out the Historically Black
    College and University Capital Financing Program entered into pursuant
    to title III, part D of the Higher Education Act of 1965, as amended,
    $208,000. (Department of Education Appropriations Act, 2001, as enacted
    by section 1(a)(1) of P.L. 106-554.)

            General Fund Credit Receipt Accounts (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-0241-0-1-502      2000 actual   2001 est.   2002 est.
    ----------------------------------------------------------------------------
    0101  Negative subsidies/subsidy
            reestimates.....................                       2
    ---------------------------------------------------------------------------

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-0241-0-1-502      2000 actual   2001 est.   2002 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
    00.09 Federal administration............           1           1           1
                                               ---------   ---------  ----------
    10.00   Total new obligations (object
              class 99.5)...................           1           1           1
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    22.00 New budget authority (gross)......           1           1           1
    23.95 Total new obligations.............          -1          -1          -1
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
          Discretionary:

    40.00   Appropriation (Federal
              administration)...............           1           1           1
                                                       1           1           1
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
          Unpaid obligations, start of year:

    72.40   Unpaid obligations, start of
              year..........................
    72.95   Uncollected customer payments
              from Federal sources, start of
              year..........................          -1          -1          -1
                                               ---------   ---------  ----------
    72.99     Obligated balance, start of
                year........................          -1          -1          -1
    73.10 Total new obligations.............           1           1           1
    73.20 Total outlays (gross).............          -1          -1          -1
          Unpaid obligations, end of year:

    74.95   Uncollected customer payments
              from Federal sources, end of
              year..........................          -1          -1
                                               ---------   ---------  ----------
    74.99     Obligated balance, end of year          -1          -1
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.90 Outlays from new discretionary
            authority.......................           1           1           1
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................           1           1           1
    90.00 Outlays...........................           1           1           1
    ---------------------------------------------------------------------------

    Summary of Loan Levels, Subsidy Budget Authority and Outlays by Program (in
                                millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-0241-0-1-502      2000 actual   2001 est.   2002 est.
    ----------------------------------------------------------------------------
        Direct loan subsidy budget authority:
    1330  Subsidy budget authority downward
            reestimate......................                      -2
                                               ---------   ---------  ----------
    1339    Total subsidy budget authority..                      -2
        Direct loan subsidy outlays:
    1340  Subsidy outlays downward
            reestimate......................                      -2
                                               ---------   ---------  ----------
    1349    Total subsidy outlays...........                      -2
    ----------------------------------------------------------------------------

        Administrative expense data:
    3510  Budget authority..................           1           1           1
    3580  Outlays from balances.............           1           1
    3590  Outlays from new authority........
    ---------------------------------------------------------------------------

        The College Housing and Academic Facilities Loans Program and the
    Historically Black College and University Capital Financing Program are
    administered separately, but are consolidated for presentation purposes.

        College Housing and Academic Facilities Loans Program.--Funds for
    this activity pay the Federal costs for administering the College
    Housing and Academic Facilities Loans (CHAFL), College Housing Loans
    (CHL), and Higher Education Facilities Loans (HEFL) programs. Prior to
    1994, these programs provided financing for the construction,
    reconstruction, and renovation of housing, academic, and other
    educational facilities. Although no new loans have been awarded since
    fiscal year 1993, costs for administering the outstanding loans will
    remain for at least 30 more years. Agreements exist with the Department
    of Health and Human Services to provide architectural and engineering
    services and with the Federal Reserve Bank to provide loan servicing.
    The 2002 budget request provides funding for personnel compensation and
    other administrative costs. In accordance with the Federal Credit Reform
    Act, loan servicing costs for CHL and HEFL are paid from their
    respective collections.

    [[Page 363]]

        Historically Black College and University Capital Financing
    Program.--The Historically Black College and University (HBCU) Capital
    Financing Program provides HBCUs with access to capital financing for
    the repair, renovation, and construction of classrooms, libraries,
    laboratories, dormitories, instructional equipment, and research
    instrumentation. The Higher Education Amendments of 1992 granted the
    Department authority to enter into insurance agreements with a private
    for-profit Designated Bonding Authority to guarantee no more than
    $375,000,000 in outstanding principal and unpaid accrued interest
    combined. The bonding authority issues the bonds and maintains an escrow
    account in which 5 percent of each institution's principal is deposited.
    This amount is estimated to be sufficient to cover all potential
    delinquencies and defaults.

        Since the first loan was issued in 1996, a total of 8 loans for $53
    million have been made. Additional loans are expected in 2001 and 2002.
    No subsidy appropriations are required. The 2002 budget provides funds
    for continuing Federal administrative activities only.

                                  Personnel Summary

    ----------------------------------------------------------------------------
    Identification code 91-0241-0-1-502      2000 actual   2001 est.   2002 est.
    ----------------------------------------------------------------------------
    1001  Total compensable workyears: Full-
            time equivalent employment......           7           7           7
    ---------------------------------------------------------------------------

         College Housing and Academic Facilities Loans Financing Account

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-4252-0-3-502      2000 actual   2001 est.   2002 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
    00.02 Interest paid to Treasury.........           2           1           1
    08.02 Payment of downward reestimate to
            receipt account.................                       1
    08.04 Payment of interest on downward
            reestimates to receipt account..                       1
                                               ---------   ---------  ----------
    08.91   Subtotal, Downward reestimate
              payments......................                       2
                                               ---------   ---------  ----------
    10.00   Total new obligations...........           2           3           1
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    22.00 New financing authority (gross)...           2           4           2
    22.10 Resources available from
            recoveries of prior year
            obligations.....................           2
    22.40 Capital transfer to general fund..          -1
    22.60 Portion applied to repay debt.....                      -1          -1
    22.70 Balance of authority to borrow
            withdrawn.......................          -1
                                               ---------   ---------  ----------
    23.90   Total budgetary resources
              available for obligation......           2           3           1
    23.95 Total new obligations.............          -2          -3          -1
    ----------------------------------------------------------------------------

        New financing authority (gross), detail:
          Mandatory:

    67.15   Authority to borrow (indefinite)                       2
    69.00 Offsetting collections (cash).....           2           2           2
                                               ---------   ---------  ----------
    70.00   Total new financing authority
              (gross).......................           2           4           2
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
          Unpaid obligations, start of year:

    72.40   Unpaid obligations: Borrowing
              Authority.....................           6
                                               ---------   ---------  ----------
    72.99     Obligated balance, start of
                year........................           6
    73.10 Total new obligations.............           2           3           1
    73.20 Total financing disbursements
            (gross).........................          -6          -3          -1
    73.45 Recoveries of prior year
            obligations.....................          -2
    87.00 Total financing disbursements
            (gross).........................           6           3           1
    ----------------------------------------------------------------------------

        Offsets:
          Against gross financing authority and
              financing disbursements:

            Offsetting collections (cash)
                from:
              Non-Federal sources:
    88.40       Interest repayments.........          -1          -1          -1
    88.40       Principal repayments........          -1          -1          -1
                                               ---------   ---------  ----------
    88.90       Total, offsetting
                  collections (cash)........          -2          -2          -2
    ----------------------------------------------------------------------------

        Net financing authority and financing
            disbursements:
    89.00 Financing authority...............                       2
    90.00 Financing disbursements...........           4           1          -1
    ---------------------------------------------------------------------------

        The College Housing and Academic Facilities Loans Financing Account
    records all cash flows to and from the Government resulting from direct
    loans made in fiscal years 1992 and 1993.

                   Status of Direct Loans (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-4252-0-3-502      2000 actual   2001 est.   2002 est.
    ----------------------------------------------------------------------------
        Position with respect to appropriations act
                    limitation on obligations:
    1111  Limitation on direct loans........
                                               ---------   ---------  ----------
    1150    Total direct loan obligations...
    ----------------------------------------------------------------------------

        Cumulative balance of direct loans
                    outstanding:
    1210  Outstanding, start of year........          23          26          25
    1231  Disbursements: Direct loan
            disbursements...................           3
    1251  Repayments: Repayments and
            prepayments.....................                      -1          -1
                                               ---------   ---------  ----------
    1290    Outstanding, end of year........          26          25          24
    ---------------------------------------------------------------------------

                                 Balance Sheet (in millions of dollars)

    -----------------------------------------------------------------------------------------------
    Identification code   91-4252-0-3-502    1999 actual    2000 actual     2001 est.      2002 est.
    -----------------------------------------------------------------------------------------------
        ASSETS:
          Net value of assets related to
              post-1991 direct loans
              receivable:

    1401    Direct loans receivable, gross..          22             26            25             24
    1405    Allowance for subsidy cost (-)..                         -4            -4             -3
                                            ------------ --------------  ------------  -------------
    1499      Net present value of assets
                related to direct loans.....          22             22            21             21
                                            ------------ --------------  ------------  -------------
    1999    Total assets....................          22             22            21             21
        LIABILITIES:
    2103  Federal liabilities: Debt.........          22             22            23             23
                                            ------------ --------------  ------------  -------------
    2999    Total liabilities...............          22             22            23             23
                                            ------------ --------------  ------------  -------------
    4999  Total liabilities and net position          22             22            23             23
    -----------------------------------------------------------------------------------------------

        College Housing and Academic Facilities Loans Liquidating Account

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-0242-0-1-502      2000 actual   2001 est.   2002 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
    00.01 New loan awards...................           2
    00.02 Interest paid to Treasury.........          18          14          14
                                               ---------   ---------  ----------
    10.00   Total new obligations...........          20          14          14
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    21.40 Unobligated balance carried
            forward, start of year..........          33          72
    22.00 New budget authority (gross)......          59          60          50
    22.60 Portion applied to repay debt.....                    -118         -36
                                               ---------   ---------  ----------
    23.90   Total budgetary resources
              available for obligation......          92          14          14
    23.95 Total new obligations.............         -20         -14         -14
    24.40 Unobligated balance carried
            forward, end of year............          72
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
          Mandatory:

    60.05   Appropriation (indefinite)......                       7           2
    69.00 Offsetting collections (cash).....          63          55          50
    69.27 Capital transfer to general fund..          -4          -2          -2
                                               ---------   ---------  ----------
    69.90   Spending authority from
              offsetting collections (total
              mandatory)....................          59          53          48
                                               ---------   ---------  ----------
    70.00   Total new budget authority
              (gross).......................          59          60          50
    ----------------------------------------------------------------------------

    [[Page 364]]

        Change in unpaid obligations:
          Unpaid obligations, start of year:

    72.40   Unpaid obligations, start of
              year..........................          23          25          19
                                               ---------   ---------  ----------
    72.99     Obligated balance, start of
                year........................          23          25          19
    73.10 Total new obligations.............          20          14          14
    73.20 Total outlays (gross).............         -17         -20         -15
          Unpaid obligations, end of year:

    74.40   Unpaid obligations, end of year.          25          19          18
                                               ---------   ---------  ----------
    74.99     Obligated balance, end of year          25          19          18
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.98 Outlays from mandatory balances...          17          20          15
    ----------------------------------------------------------------------------

        Offsets:
          Against gross budget authority and outlays:

            Offsetting collections (cash)
                from:
              Non-Federal sources:
    88.40       Repayments of principal.....         -43         -38         -34
    88.40       Interest received on loans..         -20         -17         -16
                                               ---------   ---------  ----------
    88.90       Total, offsetting
                  collections (cash)........         -63         -55         -50
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................          -4           5
    90.00 Outlays...........................         -46         -35         -35
    ---------------------------------------------------------------------------

        The College Housing and Academic Facilities Loans Liquidating
    Account records all cash flows to and from the Government resulting from
    direct loans made prior to 1992. This account includes loans made under
    the College Housing and Academic Facilities Loans, College Housing
    Loans, and Higher Education Facilities Loans programs, which continue to
    be administered separately.

                   Status of Direct Loans (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-0242-0-1-502      2000 actual   2001 est.   2002 est.
    ----------------------------------------------------------------------------
              CHAFL LIQUIDATING
        Cumulative balance of direct loans
                    outstanding:
    1210  Outstanding, start of year........         148         144         138
    1231  Disbursements: Direct loan
            disbursements...................           4
    1251  Repayments: Repayments and
            prepayments.....................          -8          -6          -5
                                               ---------   ---------  ----------
    1290    Outstanding, end of year........         144         138         133
    ----------------------------------------------------------------------------

              HIGHER EDUCATION FACILITIES
                  LOANS
        Cumulative balance of direct loans
                    outstanding:
    1210  Outstanding, start of year........          30          27          24
    1251  Repayments: Repayments and
            prepayments.....................          -3          -3          -2
                                               ---------   ---------  ----------
    1290    Outstanding, end of year........          27          24          22
    ----------------------------------------------------------------------------

              COLLEGE HOUSING LOANS
        Cumulative balance of direct loans
                    outstanding:
    1210  Outstanding, start of year........         345         313         283
    1251  Repayments: Repayments and
            prepayments.....................         -32         -30         -27
                                               ---------   ---------  ----------
    1290    Outstanding, end of year........         313         283         256
    ---------------------------------------------------------------------------

                            Statement of Operations (in millions of dollars)

    -----------------------------------------------------------------------------------------------
    Identification code   91-0242-0-1-502    1999 actual    2000 actual     2001 est.      2002 est.
    -----------------------------------------------------------------------------------------------
        CHAFL LIQUIDATING:
    0111  Revenue...........................                         16            14             12
    0112  Expense...........................                        -12           -21            -14
                                            ------------ --------------  ------------  -------------
    0115    Net income or loss (-)..........                          4            -7             -2
        HIGHER EDUCATION FACILITIES LOANS:
    0121  Revenue...........................                          5             3              3
    0122  Expense...........................                         -3            -1             -1
                                            ------------ --------------  ------------  -------------
    0125    Net income or loss (-)..........                          2             2              2
        COLLEGE HOUSING LOANS:
    0131  Revenue...........................                         42            38             35
    0132  Expense...........................                         -5           -38            -35
                                            ------------ --------------  ------------  -------------
    0135    Net income or loss (-)..........                         37
                                            ------------ --------------  ------------  -------------
    0191  Total revenues....................                         63            55             50
                                            ------------ --------------  ------------  -------------
    0192  Total expenses....................                        -20           -60            -50
                                            ------------ --------------  ------------  -------------
    0195  Total income or loss (-)..........                         43            -5
                                            ------------ --------------  ------------  -------------
    0199  Total comprehensive income........                         43            -5
    -----------------------------------------------------------------------------------------------

                                 Balance Sheet (in millions of dollars)

    -----------------------------------------------------------------------------------------------
    Identification code   91-0242-0-1-502    1999 actual    2000 actual     2001 est.      2002 est.
    -----------------------------------------------------------------------------------------------
        ASSETS:
          Net value of assets related to
              pre-1992 direct loans
              receivable and acquired
              defaulted guaranteed loans
              receivable:

    1601    Direct loans, gross.............                        484           445            412
    1602    Interest receivable.............                          7             7              6
                                            ------------ --------------  ------------  -------------
    1699      Value of assets related to
                direct loans................                        491           452            418
                                            ------------ --------------  ------------  -------------
    1999    Total assets....................                        491           452            418
        LIABILITIES:
    2103  Federal liabilities: Debt.........                        346           228            191
                                            ------------ --------------  ------------  -------------
    2999    Total liabilities...............                        346           228            191
                                            ------------ --------------  ------------  -------------
    4999  Total liabilities and net position                        346           228            191
    -----------------------------------------------------------------------------------------------

                   Object Classification (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-0242-0-1-502      2000 actual   2001 est.   2002 est.
    ----------------------------------------------------------------------------
    43.0  Interest and dividends............          18          14          14
    44.0  Refunds...........................           2
                                               ---------   ---------  ----------
    99.9    Total new obligations...........          20          14          14
    ---------------------------------------------------------------------------

    Historically Black College and University Capital Financing Direct Loan
                                Financing Account

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-4255-0-3-502      2000 actual   2001 est.   2002 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
    00.01 Direct Loan Awards................          35          30          30
    00.02 Interest paid to Treasury.........           1           1           2
                                               ---------   ---------  ----------
    10.00   Total new obligations...........          36          31          32
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    22.00 New financing authority (gross)...          60          32          33
    22.70 Balance of authority to borrow
            withdrawn.......................         -24
                                               ---------   ---------  ----------
    23.90   Total budgetary resources
              available for obligation......          36          32          33
    23.95 Total new obligations.............         -36         -31         -32
    ----------------------------------------------------------------------------

        New financing authority (gross), detail:
          Mandatory:

    67.15   Authority to borrow (indefinite)          59          30          30
    69.00 Offsetting collections (cash).....           1           2           3
                                               ---------   ---------  ----------
    70.00   Total new financing authority
              (gross).......................          60          32          33
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
          Unpaid obligations, start of year:

    72.40   Unpaid obligations, start of
              year..........................                      25          46
                                               ---------   ---------  ----------
    72.99     Obligated balance, start of
                year........................                      25          46
    73.10 Total new obligations.............          36          31          32
    73.20 Total financing disbursements
            (gross).........................         -11         -11         -17
          Unpaid obligations, end of year:

    74.40   Unpaid obligations: Borrowing
              Authority.....................          25          46          61
                                               ---------   ---------  ----------
    74.99     Obligated balance, end of year          25          46          61
    87.00 Total financing disbursements
            (gross).........................          11          11          17
    ----------------------------------------------------------------------------

    [[Page 365]]

        Offsets:
          Against gross financing authority and
              financing disbursements:

            Offsetting collections (cash)
                from:
              Non-Federal sources:
    88.40       Interest repayments.........          -1          -2          -2
    88.40       Principal repayments........                                  -1
                                               ---------   ---------  ----------
    88.90       Total, offsetting
                  collections (cash)........          -1          -2          -3
    ----------------------------------------------------------------------------

        Net financing authority and financing
            disbursements:
    89.00 Financing authority...............          59          30          30
    90.00 Financing disbursements...........          10           9          14
    ---------------------------------------------------------------------------

        In 1997, the Federal Financing Bank (FFB) began purchasing bonds
    issued by the HBCU Designated Bonding Authority. Under the policies
    governing Federal credit programs, bonds purchased by the FFB and
    supported by the Department of Education with a letter of credit create
    the equivalent of a Federal direct loan. For budget purposes, all FFB
    loans shall be treated as direct loans. HBCU bonds are still available
    for purchase by the private sector, and these will be treated as loan
    guarantees. However, the Department anticipates that all HBCU loans will
    be financed by the FFB.

                   Status of Direct Loans (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-4255-0-3-502      2000 actual   2001 est.   2002 est.
    ----------------------------------------------------------------------------
        Position with respect to appropriations act
                    limitation on obligations:
    1111  Limitation on direct loans........         346         311         281
    1113  Unobligated limitation carried
            forward.........................        -311        -281        -251
                                               ---------   ---------  ----------
    1150    Total direct loan obligations...          35          30          30
    ----------------------------------------------------------------------------

        Cumulative balance of direct loans
                    outstanding:
    1210  Outstanding, start of year........          11          21          30
    1231  Disbursements: Direct loan
            disbursements...................          10           9          15
    1251  Repayments: Repayments and
            prepayments.....................                                  -1
                                               ---------   ---------  ----------
    1290    Outstanding, end of year........          21          30          44
    ---------------------------------------------------------------------------

                                 Balance Sheet (in millions of dollars)

    -----------------------------------------------------------------------------------------------
    Identification code   91-4255-0-3-502    1999 actual    2000 actual     2001 est.      2002 est.
    -----------------------------------------------------------------------------------------------
        ASSETS:
          Net value of assets related to
              post-1991 direct loans
              receivable:

    1401    Direct loans receivable, gross..          11             21            30             44
                                            ------------ --------------  ------------  -------------
    1499      Net present value of assets
                related to direct loans.....          11             21            30             44
                                            ------------ --------------  ------------  -------------
    1999    Total assets....................          11             21            30             44
        LIABILITIES:
    2103  Federal liabilities: Debt.........          11             46            76            105
                                            ------------ --------------  ------------  -------------
    2999    Total liabilities...............          11             46            76            105
                                            ------------ --------------  ------------  -------------
    4999  Total liabilities and net position          11             46            76            105
    -----------------------------------------------------------------------------------------------

                     OFFICE OF STUDENT FINANCIAL ASSISTANCE

                                  Federal Funds

    General and special funds:

                          Student Financial Assistance

        For carrying out subparts 1, 3 and 4 of part A, section 428K, part C
    and part E of title IV of the Higher Education Act of 1965, as amended,
    [$10,674,000,000] $11,674,000,000, which shall remain available through
    September 30, [2002] 2003.
        The maximum Pell Grant for which a student shall be eligible during
    award year [2001-2002] 2002-2003 shall be [$3,750] $3,850: Provided,
    That notwithstanding section 401(g) of the Act, if the Secretary
    determines, prior to publication of the payment schedule for such award
    year, that the amount included within this appropriation for Pell Grant
    awards in such award year, and any funds available from the fiscal year
    [2000] 2001 appropriation for Pell Grant awards, are insufficient to
    satisfy fully all such awards for which students are eligible, as
    calculated under section 401(b) of the Act, the amount paid for each
    such award shall be reduced by either a fixed or variable percentage, or
    by a fixed dollar amount, as determined in accordance with a schedule of
    reductions established by the Secretary for this purpose. (Department of
    Education Appropriations Act, 2001, as enacted by section 1(a)(1) of
    P.L. 106-554.)

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-0200-0-1-502      2000 actual   2001 est.   2002 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
          Federal Pell grants:

    01.01   Federal Pell grants.............      10,730       8,657       9,400
          Campus-based aid:

    02.01   Federal supplemental educational
              opportunity grants (SEOG).....         636         693         691
    02.02   Federal work-study..............         944       1,014       1,011
    02.03   Federal Perkins loans: Federal
              capital contributions.........         104         100         100
    02.05   Federal Perkins loans: Loan
              cancellations.................          30          60          60
                                               ---------   ---------  ----------
    02.91     Subtotal, Campus-based
                activities..................       1,714       1,867       1,862
    03.01 Leveraging educational assistance
            partnership.....................          40          55          55
    04.01 Loan forgiveness for child care
            providers.......................                       1           1
                                               ---------   ---------  ----------
    10.00   Total new obligations (object
              class 41.0)...................      12,484      10,580      11,318
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    21.40 Unobligated balance carried
            forward, start of year..........       4,554       1,492       1,586
    22.00 New budget authority (gross)......       9,375      10,674      11,674
    22.10 Resources available from
            recoveries of prior year
            obligations.....................          47
                                               ---------   ---------  ----------
    23.90   Total budgetary resources
              available for obligation......      13,976      12,166      13,260
    23.95 Total new obligations.............     -12,484     -10,580     -11,318
    24.40 Unobligated balance carried
            forward, end of year............       1,492       1,586       1,942
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
          Discretionary:

    40.00   Appropriation...................       9,435      10,674      11,674
    40.15   Appropriation (emergency).......          10
    40.76   Reduction pursuant to P.L. 106-
              113...........................         -70
                                               ---------   ---------  ----------
    43.00     Appropriation (total
                discretionary)..............       9,375      10,674      11,674
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
          Unpaid obligations, start of year:

    72.40   Unpaid obligations, start of
              year..........................       3,176       6,476       6,995
                                               ---------   ---------  ----------
    72.99     Obligated balance, start of
                year........................       3,176       6,476       6,995
    73.10 Total new obligations.............      12,484      10,580      11,318
    73.20 Total outlays (gross).............      -9,060     -10,061     -11,158
    73.40 Adjustments in expired accounts
            (net)...........................         -76
    73.45 Recoveries of prior year
            obligations.....................         -47
          Unpaid obligations, end of year:

    74.40   Unpaid obligations, end of year.       6,476       6,995       7,155
                                               ---------   ---------  ----------
    74.99     Obligated balance, end of year       6,476       6,995       7,155
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.90 Outlays from new discretionary
            authority.......................       2,186       2,302       2,816
    86.93 Outlays from discretionary
            balances........................       6,874       7,759       8,342
                                               ---------   ---------  ----------
    87.00   Total outlays (gross)...........       9,060      10,061      11,158
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................       9,375      10,674      11,674
    90.00 Outlays...........................       9,060      10,061      11,158
    ---------------------------------------------------------------------------

                   Status of Direct Loans (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-0200-0-1-502      2000 actual   2001 est.   2002 est.
    ----------------------------------------------------------------------------
        Cumulative balance of direct loans
                    outstanding: \1\
    1210  Outstanding, start of year........         400         394         377
    1231  Disbursements: Direct loan
            disbursements...................          25          25          25
    1251  Repayments: Repayments and
            prepayments.....................         -45         -37         -30
    1264  Write-offs for default: Other
            adjustments, net................          14          -5          -8
                                               ---------   ---------  ----------
    1290    Outstanding, end of year........         394         377         364
    ---------------------------------------------------------------------------
        \1\ Includes in all years institutional matching share of defaulted
    notes assigned from institutions to the Education Department.

    [[Page 366]]

        The Administration's 2002 budget for the SFA account is $11.674
    billion, an increase of $1 billion, or 9.4 percent, over the 2001
    appropriation, which together with matching funds (less allowable
    administrative costs) would provide over 7 million awards totalling more
    than $12.9 billion in available aid.

        Federal Pell Grants.--Undergraduate students establish eligibility
    for these grants under award and need determination rules set out in the
    authorizing statute and the annual appropriations act.

        The Administration proposes $9.756 billion, an increase of $1
    billion or 11.4 percent over the 2001 appropriation level, for the Pell
    Grant program in 2002, to raise the maximum award for the 2002-2003
    award year to $3,850--the highest ever and an increase of $100 from the
    2001-2002 level of $3,750. Approximately 4 million students would
    receive grants under the program in the 2002-2003 award year.

        Recent program data indicate that more people are applying for Pell
    Grants, and more of those applying are eligible to receive aid, than was
    previously forecast. As a result, the cost of funding awards for the
    2001-2002 award year has increased by $117 million since 2001 funds were
    appropriated; this additional need in 2001 would be funded from the
    proposed $1 billion increase for 2002. In addition, the 2001
    appropriation level was supplemented by $319 million in surplus funds
    from prior years to fully fund the maximum award level of $3,750. No
    surplus is expected to be available to supplement 2002 appropriations.
    Therefore, another $436 million of the proposed $1 billion increase for
    2002 is needed just to maintain the previous year's funding level,
    replacing the $117 million and $319 million used for 2001. The remaining
    $447 million of the $1 billion would support increasing the maximum
    award by $100, to $3,850, for academic year 2002-2003 and would allow
    for the possibility of further growth in program costs.

        Campus-based programs.--The Federal Supplemental Educational
    Opportunity Grants, Federal Work-Study, and Federal Perkins Loan
    programs are called the ``campus-based'' programs because participating
    institutions are responsible for administering the programs on their own
    campuses. These programs provide aid administrators with considerable
    flexibility in the packaging of financial aid awards to best meet the
    needs of students.

        Federal Supplemental Educational Opportunity Grants (SEOG).--Federal
    funds are awarded by formula to qualifying institutions, which use these
    funds to award grants to undergraduate students. While institutions have
    discretion in awarding these funds, they are required to give priority
    to Pell Grant recipients and other students with exceptional need. The
    Federal share of such grants may not exceed 75 percent of the total
    grant. The Administration proposes $691 million for the SEOG program in
    2002, the same as the 2001 level. This level of funding would provide
    approximately $875 million in available aid to an estimated 1.2 million
    needy students.

        Federal Work-Study.--Federal funds are awarded by formula to
    qualifying institutions, which develop and provide part-time jobs for
    eligible undergraduate and graduate students with demonstrated need.
    Hourly earnings under the program must be at least equal to the Federal
    minimum wage. Federal funding in most cases pays 75 percent of a
    student's hourly wages, with the remaining 25 percent paid by the
    employer. To continue to provide nearly 1 million students the
    opportunity to work their way through college, the Administration
    proposes $1.011 billion, the same as the 2001 appropriation, for the
    Work-Study program.

        Perkins Loan Program.--Institutions award low-interest loans from
    institutional revolving funds, which are comprised of Federal Capital
    Contributions, institutional matching funds, and student repayments on
    outstanding loans. The Administration proposes $100 million in new
    budget authority for the Perkins loan program, the same as the 2001
    level. This level of funding would provide $1.1 billion in available aid
    to some 695,000 needy undergraduate and graduate students in the 2002-
    2003 award year.

        Perkins Loan Program--Cancellations.--Under the Perkins Loan
    cancellation program, institutional revolving funds are reimbursed for
    indebtedness canceled as a result of a borrower engaging in certain
    public service activities, as specified in the Higher Education Act.
    Amendments to the Higher Education Act in 1992 and 1998 greatly expanded
    the number of borrowers with loans eligible for cancellation. The
    Administration's budget proposal for Perkins Loan cancellations is $60
    million, the same as the 2001 level.

        Leveraging Educational Assistance Partnership Program.--Under this
    program, formerly known as the State Student Incentive Grant (SSIG)
    Program, Federal matching funds are awarded to assist States in
    providing programs of grants and work-study assistance to needy students
    attending qualifying institutions. When appropriations are $30 million
    or less, States must match these Federal funds on at least a dollar-for-
    dollar basis and comply with statutory maintenance of effort
    requirements. State awards to students may not exceed $5,000 per
    academic year.

        When appropriations exceed $30 million, those funds in excess of $30
    million are reserved for the Special Leveraging Educational Assistance
    Partnership (LEAP) Program. Under Special LEAP, States may use the grant
    funds for several new authorized activities including increasing the
    dollar amount of LEAP grants to students who demonstrate financial need.
    The Federal share of the cost of the authorized activities may not
    exceed 33\1/3\ percent. The Administration proposes $55 million for LEAP
    in 2002, the same as the 2001 appropriation.

        Loan Forgiveness for Child Care Providers.--Under this demonstration
    program, student loan borrowers who have earned degrees in early
    childhood education and worked for two full years as child care
    providers in low-income communities may have a portion of their loan
    obligation forgiven. Additional forgiveness is awarded for each
    additional consecutive year of service, up to a total of 100 percent of
    the borrower's outstanding balance after five full years. Awards are
    made on a first-come, first-served basis. The Administration proposes $1
    million for Loan Forgiveness for Child Care Providers in 2002, the same
    as the 2001 level. Fewer than 300 recipients are expected in either 2001
    or 2002.

        Funding Tables.--The following tables display student aid funds
    available, the number of aid awards, average awards, and the
    unduplicated count of recipients from any Federal student aid program.
    The tables include the aid from programs in the Student Financial
    Assistance account, as well as aid from the Federal Family Education
    Loan (FFEL) program, and the William D. Ford Federal Direct Loan
    program. Loan amounts reflect the capital actually loaned, not the
    Federal cost of those loans. The data in these tables include the
    effects of matching funds wherever applicable.

          AID FUNDS AVAILABLE FOR POSTSECONDARY EDUCATION AND TRAINING

                            (in millions of dollars)

                                         2000 actual  2001 est.   2002 est.
    Pell grants.........................       7,925       9,172       9,562
    Student loans:
      Guaranteed student loans:
        Stafford loans..................      11,259      11,436      11,683
        Unsubsidized Stafford loans.....       9,126       9,907      10,606
        PLUS............................       2,326       2,560       2,821
      Direct student loans:
        Stafford loans..................       5,366       5,442       5,575

    [[Page 367]]

        Unsubsidized Stafford loans.....       3,807       4,129       4,420
        PLUS............................       1,175       1,290       1,419
      Consolidation:
        FFEL............................       5,695       5,948       6,083
        Direct Loans....................       5,369       8,290       5,307
                                        ------------------------------------
            Student loans, subtotal.....      44,124      49,002      47,914
    Work-study..........................       1,120       1,215       1,215
    Supplemental educational opportunity
    grants..............................         799         875         875
    Perkins loans.......................       1,084       1,113       1,113
    Leveraging educational assistance
    partnership.........................          90         135         135
    Loan forgiveness for child care
    providers...........................                       1           1
                                        ------------------------------------
            Total aid available.........      55,141      61,513      60,816
                                        ====================================
        Note: Detail may not add to totals due to rounding.

                              NUMBER OF AID AWARDS

                                 [In thousands]

                                         2000 actual  2001 est.   2002 est.
    Pell grants.........................       3,853       3,969       4,032
    Student loans:
      Guaranteed student loans:
        Stafford loans..................       3,293       3,345       3,377
        Unsubsidized Stafford loans.....       2,244       2,408       2,524
        PLUS............................         342         366         388
      Direct student loans:
        Stafford loans..................       1,552       1,535       1,553
        Unsubsidized Stafford loans.....       1,010       1,028       1,078
        PLUS............................         177         183         193
      Consolidation:
        FFEL............................         298         306         309
        Direct Loans....................         272         419         275
                                        ------------------------------------
            Student loans, subtotal.....       9,187       9,589       9,699
    Work-study..........................         912         990         990
    Supplemental educational opportunity
    grants..............................       1,087       1,190       1,190
    Perkins loans.......................         677         695         695
    Leveraging educational assistance
    partnership.........................          90         135         135
    Loan forgiveness for child care
    providers...........................                       *           *
                                        ------------------------------------
            Total awards................      15,806      16,568      16,741
                                        ====================================
        Note: Detail may not add to totals due to rounding.
        *Fewer than 500 recipients

                               AVERAGE AID AWARDS

                               [In whole dollars]

                                         2000 actual  2001 est.   2002 est.
    Pell grants.........................       2,057       2,311       2,371
    Student loans:
      Guaranteed student loans:
        Stafford loans..................       3,419       3,418       3,460
        Unsubsidized Stafford loans.....       4,066       4,115       4,202
        PLUS............................       6,811       7,002       7,276
      Direct student loans:
        Stafford loans..................       3,457       3,545       3,589
        Unsubsidized Stafford loans.....       3,771       4,017       4,099
        PLUS............................       6,643       7,056       7,335
      Consolidation:
        FFEL............................      19,122      19,429      19,666
        Direct Loans....................      19,747      19,785      19,265
    Work-study..........................       1,228       1,228       1,228
    Supplemental educational opportunity
    grants..............................         735         735         735
    Perkins loans.......................       1,600       1,600       1,600
    Leveraging Educational Assistance
    Partnership.........................       1,000       1,000       1,000
    Loan Forgiveness for Child Care
    Providers...........................                   5,000       5,000

                            NUMBER OF STUDENTS AIDED

                                 [In thousands]

                                         2000 actual  2001 est.   2002 est.
    Unduplicated student count..........       7,778       8,145       8,191

        The following table displays institutional administrative costs paid
    from program funds.

                     ADMINISTRATIVE PAYMENTS TO INSTITUTIONS

                            [In millions of dollars]

                                         2000 actual  2001 est.   2002 est.
    Pell grants.........................          19          20          20
    Work-study..........................          70          76          76
    Supplemental educational opportunity
    grants..............................          32          35          35
    Perkins loans.......................          43          45          45

        The following table displays the status of defaulted Perkins loans
    held by the Department and by institutions.

                             DEFAULTED PERKINS LOANS

                            (In millions of dollars)

                                         2000 actual  2001 est.   2002 est.
    Outstanding defaulted loans,
        beginning of year:
      Assigned defaulted loans \1\......         400         394         377
      Unassigned defaulted loans \2\....         980       1,017       1,056
    New defaulted loans.................         185         201         263
    Collections on assigned loans.......         -45         -37         -30
    Collections on unassigned loans.....        -102        -107        -113
    Write-offs for assigned loans.......          14          -5          -8
    Write-offs for unassigned loans.....         -21         -30         -43
                                        ------------------------------------
    Outstanding defaulted loans, end of
    year................................       1,411       1,433       1,502
                                        ====================================
        \1\ Permanently assigned to the Federal Government for collection.
        \2\ Unassigned loans at institutions.

                        Federal Student Loan Reserve Fund

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-4257-0-3-502      2000 actual   2001 est.   2002 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
    01.02 Obligations, non-federal..........       1,953       3,560       3,903
                                               ---------   ---------  ----------
    10.00   Total new obligations...........       1,953       3,560       3,903
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    21.40 Unobligated balance carried
            forward, start of year..........       2,093       2,232       2,329
    22.00 New budget authority (gross)......       2,092       3,657       3,962
    22.40 Capital transfer to general fund..                              -1,085
                                               ---------   ---------  ----------
    23.90   Total budgetary resources
              available for obligation......       4,185       5,889       5,206
    23.95 Total new obligations.............      -1,953      -3,560      -3,903
    24.40 Unobligated balance carried
            forward, end of year............       2,232       2,329       1,303
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
          Mandatory:

    69.00   Offsetting collections (cash)...       2,092       3,657       3,962
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    73.10 Total new obligations.............       1,953       3,560       3,903
    73.20 Total outlays (gross).............      -1,953      -3,560      -3,903
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.97 Outlays from new mandatory
            authority.......................       1,953       3,560       3,903
    ----------------------------------------------------------------------------

        Offsets:
          Against gross budget authority and outlays:

            Offsetting collections (cash)
                from:
    88.00     Federal sources...............      -1,646      -3,340      -3,643
    88.40     Non-Federal sources...........        -446        -317        -319
                                               ---------   ---------  ----------
    88.90       Total, offsetting
                  collections (cash)........      -2,092      -3,657      -3,962
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................
    90.00 Outlays...........................        -139         -97         -59
    ---------------------------------------------------------------------------

        The Higher Education Amendments of 1998 clarified that reserve funds
    held by public and non-profit guaranty agencies participating in the
    Federal Family Education Loan (FFEL) program are Federal property. These
    reserves are used to pay default claims from FFEL lenders and fees to
    support agency efforts to successfully avert defaults. The Federal
    Government reimburses these reserves for default claim payments. In
    addition, optional borrower guarantee fees are deposited into the
    reserves (agencies may charge borrowers up to 1 percent of loan
    principal as a guarantee fee). The following schedules reflect the
    balances in these guaranty agency funds.

                            Statement of Operations (in millions of dollars)

    -----------------------------------------------------------------------------------------------
    Identification code   91-4257-0-3-502    1999 actual    2000 actual     2001 est.      2002 est.
    -----------------------------------------------------------------------------------------------
    0101  Revenue...........................                      2,092         3,657          3,962
    0102  Expense...........................                     -1,953        -3,560         -3,903
                                            ------------ --------------  ------------  -------------
    0105  Net income or loss (-)............                        139            97             59
    -----------------------------------------------------------------------------------------------

    [[Page 368]]

                                 Balance Sheet (in millions of dollars)

    -----------------------------------------------------------------------------------------------
    Identification code   91-4257-0-3-502    1999 actual    2000 actual     2001 est.      2002 est.
    -----------------------------------------------------------------------------------------------
        ASSETS:
    1101  Federal assets: Fund balances with
            Treasury........................                      2,232         2,329          1,303
                                            ------------ --------------  ------------  -------------
    1999    Total assets....................                      2,232         2,329          1,303
        NET POSITION:
    3300  Cumulative results of operations..                      2,232         2,329          1,303
                                            ------------ --------------  ------------  -------------
    3999    Total net position..............                      2,232         2,329          1,303
    -----------------------------------------------------------------------------------------------

                   Object Classification (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-4257-0-3-502      2000 actual   2001 est.   2002 est.
    ----------------------------------------------------------------------------
    41.0  Grants, subsidies, and
            contributions...................         294         131         139
    42.0  Insurance claims and indemnities..       1,659       3,429       3,764
                                               ---------   ---------  ----------
    99.9    Total new obligations...........       1,953       3,560       3,903
    ---------------------------------------------------------------------------

    Credit accounts:

              Federal Direct Student Loan Program, Program Account

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-0243-0-1-502      2000 actual   2001 est.   2002 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
    00.05 Upward Subsidy Reestimate.........                   1,085
    00.06 Interest on Subsidy Reestimate....                      74
    00.09 Student Loan Administrative
            Expenses........................         735         770         780
                                               ---------   ---------  ----------
    10.00   Total new obligations...........         735       1,929         780
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    21.40 Unobligated balance carried
            forward, start of year..........          12          11          11
    22.00 New budget authority (gross)......         735       1,929         780
                                               ---------   ---------  ----------
    23.90   Total budgetary resources
              available for obligation......         747       1,940         791
    23.95 Total new obligations.............        -735      -1,929        -780
    24.40 Unobligated balance carried
            forward, end of year............          11          11          11
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
          Mandatory:

    60.00   Appropriation...................         735         770         780
    60.05   Appropriation (indefinite)......                   1,159
                                               ---------   ---------  ----------
    62.50     Appropriation (total
                mandatory)..................         735       1,929         780
          Offsetting collections (cash):

    69.00   Offsetting collections (cash)...       3,511       1,643       1,416
    69.00   Offsetting collections (cash)--
              Downward Reestimate...........                     531
    69.00   Offsetting collections (cash)--
              Interest on downward
              reestimate....................                     147
    69.27 Capital transfer to general fund..      -3,511      -2,321      -1,416
                                               ---------   ---------  ----------
    69.90   Spending authority from
              offsetting collections (total
              mandatory)....................
                                               ---------   ---------  ----------
    70.00   Total new budget authority
              (gross).......................         735       1,929         780
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
          Unpaid obligations, start of year:

    72.40   Unpaid obligations, start of
              year..........................         300         387         437
                                               ---------   ---------  ----------
    72.99     Obligated balance, start of
                year........................         300         387         437
    73.10 Total new obligations.............         735       1,929         780
    73.20 Total outlays (gross).............        -649      -1,879        -777
          Unpaid obligations, end of year:

    74.40   Unpaid obligations, end of year.         387         437         440
                                               ---------   ---------  ----------
    74.99     Obligated balance, end of year         387         437         440
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.97 Outlays from new mandatory
            authority.......................         433       1,641         492
    86.98 Outlays from mandatory balances...         216         238         285
                                               ---------   ---------  ----------
    87.00   Total outlays (gross)...........         649       1,879         777
    ----------------------------------------------------------------------------

        Offsets:
          Against gross budget authority and outlays:

    88.00   Offsetting collections (cash)
              from: Federal sources.........      -3,511      -2,321      -1,416
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................      -2,776        -392        -636
    90.00 Outlays...........................      -2,862        -442        -639
    ---------------------------------------------------------------------------

                     Summary of Budget Authority and Outlays

                            (in millions of dollars)

                                         2000 actual  2001 est.   2002 est.
    Enacted/requested:
      Budget Authority..................      -2,776        -392        -636
      Outlays...........................      -2,862        -442        -639
    Legislative proposal, subject to
        PAYGO:
      Budget Authority..................                                   4
      Outlays...........................                                   4
                                        ------------------------------------
    Total:
      Budget Authority..................      -2,776        -392        -632
      Outlays...........................      -2,862        -442        -635
                                        ====================================

    Summary of Loan Levels, Subsidy Budget Authority and Outlays by Program (in
                                millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-0243-0-1-502      2000 actual   2001 est.   2002 est.
    ----------------------------------------------------------------------------
        Direct loan levels supportable by subsidy
                    budget authority:
    1150  Stafford..........................       5,759       5,868       6,010
    1150  Unsubsidized Stafford.............       4,210       4,598       4,923
    1150  PLUS..............................       1,338       1,447       1,593
    1150  Consolidated......................       4,547       8,450       5,422
                                               ---------   ---------  ----------
    1159    Total direct loan levels........      15,854      20,363      17,948
        Direct loan subsidy (in percent):
    1320  Stafford..........................        2.37        2.50        2.66
    1320  Unsubsidized Stafford.............      -23.26      -22.38      -22.20
    1320  PLUS..............................      -18.07      -16.38      -16.21
    1320  Consolidated......................       -7.85       -8.01       -6.96
                                               ---------   ---------  ----------
    1329    Weighted average subsidy rate...       -9.09       -8.82       -8.74
        Direct loan subsidy budget authority:
    1330  Stafford..........................         136         147         160
    1330  Unsubsidized Stafford.............        -979      -1,029      -1,093
    1330  PLUS..............................        -242        -237        -258
    1330  Consolidated......................        -357        -677        -377
    1330  Subsidy Reestimate Upward.........                   1,159
    1330  Subsidy Reestimate Downward.......      -2,442        -678
                                               ---------   ---------  ----------
    1339    Total subsidy budget authority..      -3,884      -1,315      -1,568
        Direct loan subsidy outlays:
    1340  Stafford..........................         218         133         144
    1340  Unsubsidized Stafford.............        -754        -903        -966
    1340  PLUS..............................        -180        -209        -225
    1340  Consolidated......................        -353        -664        -369
    1340  Subsidy Reestimate Upward.........                   1,159
    1340  Subsidy Reestimate Downward.......      -2,442        -678
                                               ---------   ---------  ----------
    1349    Total subsidy outlays...........      -3,511      -1,162      -1,416
    ----------------------------------------------------------------------------

        Student loan administrative expense data:
    3510  Budget authority..................         735         770         780
    3590  Outlays...........................         649         719         777
    ---------------------------------------------------------------------------

        The Federal Government operates two major student loan programs: the
    Federal Family Education Loan (FFEL) program--formerly the Guaranteed
    Student Loan (GSL) program--and the William D. Ford Federal Direct Loan
    (Direct Loan) program. For 2002, the President is committed to improving
    the efficiency of both programs and allowing individual institutions to
    choose which of these two programs best meets their needs and the needs
    of their students.

        This summary section outlines the structure of these two programs,
    highlights their differences and similarities, and provides text tables
    displaying program cost data; loan volume, subsidy, default, and
    interest rates; and other descriptive information. As part of his 2002
    budget, the President is proposing a change to the loan forgiveness
    provisions of the Direct Loan and FFEL programs. This proposal is
    discussed as part of this program description.

    [[Page 369]]

        From its inception in 1965 through 2000, the FFEL program has
    provided over $300 billion in loans to postsecondary students and their
    parents. Since July 1, 1994, the Direct Loan program has provided $72
    billion in new and consolidation loans to students and parents. Taken
    together, the FFEL and Direct Loan programs will make almost $35 billion
    in new loans available in 2001. Because funding for these two programs
    is provided on a permanent indefinite basis, for budget purposes they
    are considered separately from other Federal student financial
    assistance programs. The FFEL and Direct Loan programs should be viewed
    in combination with these other programs, however, and with Perkins
    Loans in particular, as part of the overall Federal effort to ensure
    access to higher education.

        Loan capital in the FFEL program is provided by private lenders.
    State and private nonprofit guaranty agencies act as agents of the
    Federal Government, providing a variety of services including collection
    of some defaulted loans, default avoidance activities, and counseling to
    schools, students, and lenders. The Government provides substantial
    payments to these guaranty agencies. The Government also pays interest
    subsidies to lenders for certain borrowers, as well as most costs
    associated with loan defaults and other write-offs.

        The Direct Loan program was created by the Student Loan Reform Act
    of 1993. Under this program, the Federal Government provides loan funds
    to postsecondary institutions directly or through an alternative
    originator. The Direct Loan program began operation in academic year
    1994-1995 with 7 percent of overall loan volume and is expected to
    account for 31 percent in academic year 2000-2001. All eligible
    institutions are free to participate in either the Direct Loan or FFEL
    program.

        The Direct Loan and FFEL programs share many basic elements. Each
    program offers four types of loans: Stafford, Unsubsidized Stafford,
    PLUS for parents, and Consolidation. Evidence of financial need is
    required for a student to receive a subsidized Stafford loan. The other
    three loan programs are available to borrowers at all income levels.
    Loans can be used only to meet qualified educational expenses.

        The borrower interest rate for new Stafford Loans equals the 91-day
    Treasury bill rate plus 1.7 percent during in-school, grace, and
    deferment periods, and the 91-day Treasury bill plus 2.3 percent at all
    other times, with a cap of 8.25 percent, adjusted annually. Interest
    payments for these loans are fully subsidized by the Government while a
    student is in school and during grace and deferment periods.
    Unsubsidized Stafford loans carry the same borrower interest rate as
    Stafford loans, but have no interest subsidy. For new PLUS loans, the
    borrower interest rate equals the 91-day Treasury bill rate plus 3.1
    percent, with a cap of 9 percent and no interest subsidy.

        In the FFEL program, lenders may receive an interest subsidy, called
    a special allowance, from the Government to ensure a guaranteed rate of
    return on their loans. Special allowance payments vary by loan type, are
    determined quarterly, and are based on current borrower interest rates
    and market-yield formulas. For new Stafford and Unsubsidized Stafford
    loans, for example, the Federal Government must pay lenders a special
    allowance if the average 3-month commercial paper rate for a given
    quarter plus 2.34 percent--or 1.74 percent during in-school, grace, or
    deferment periods--is higher than the current interest rate charged
    borrowers.

        Consolidation loans allow borrowers to combine loans made under
    Title IV of the Higher Education Act--FFEL, Direct Loans, and Perkins
    Loans--as well as some loans made under the Public Health Service Act.
    The interest rate for new FFEL and Direct Consolidation loans equals the
    weighted average of the interest rate on the loans consolidated, rounded
    up to the nearest one-eighth of one percent. Lenders may choose to offer
    a lower rate. Interest rates for all new FFEL and Direct Consolidation
    Loans are capped at 8.25 percent.

        FFEL borrowers pay an origination fee to the Government equal to 3
    percent of principal, and are also liable for a guaranty agency
    insurance premium of up to 1 percent of principal. Guaranty agencies
    have the option of waiving this premium and FFEL lenders have the option
    of paying some or all of a borrower's origination fee for Stafford Loan
    borrowers. Direct Loan borrowers are charged an origination fee equal to
    3 percent of principal, which partially offsets Federal program
    operation costs. Borrowers in both programs may be offered financial
    incentives to encourage prompt repayment.

        Loan limits are also identical across the two programs. In addition,
    loans made under both programs are discharged when borrowers die, are
    totally and permanently disabled, or, under some circumstances, declare
    bankruptcy.

        Under both programs, new borrowers after October 1, 1998, who are
    employed as teachers in schools serving low-income populations for five
    consecutive, complete school years, qualify for up to $5,000 in loan
    forgiveness. The Administration is proposing to increase this benefit to
    a maximum of $17,500 for qualifying mathematics and science teachers.

        Borrowers under Direct Loans may choose from among five repayment
    plans including income-contingent repayment (``pay-as-you-can''), under
    which annual repayment amounts vary based on the income of the borrower
    and the amount borrowed, and payments can be made over 25 years.
    Borrowers may switch between repayment plans at any time. (Income-
    contingent repayment is not available to Direct PLUS borrowers).

        FFEL borrowers may choose from among four repayment plans. Repayment
    periods under standard, graduated, and income-sensitive repayment may
    not exceed 10 years. An extended repayment plan of up to 25 years is
    available for new borrowers with outstanding loans totalling more than
    $30,000. FFEL borrowers may change repayment plans annually.

        In order to ensure the uninterrupted availability of aid funds for
    students and parents, Congress provided permanent funding to support
    student aid administration and expenses. These funds support Department
    personnel and contractors for Direct Loan origination and servicing,
    payments to guaranty agencies, and certain costs associated with
    activities common to Direct Loans, FFEL and other student assistance
    programs, such as application printing and processing. Discretionary
    funds requested for the FFEL program support additional Department
    personnel and administrative activities associated with operating the
    program.

        Performance indicators have been developed on a broad spectrum of
    policy objectives in both the Direct Loan and FFEL programs. These
    indicators measure program efficiency, Federal costs, and financial
    management, as well as borrower and institutional satisfaction.

        The following tables display performance indicators and program
    data; including projected overall Direct Loan and FFEL costs; loan
    volume, number of loans, and average loan amount; descriptive data, and
    program activity under the President's budget and legislative request.

                      Funding Levels (In thousands of dollars)

    ----------------------------------------------------------------------------
                                            2000 actual    2001 est.   2002 est.
    ----------------------------------------------------------------------------
    Program Cost:
    FFEL:
      Liquidating \1\.......................(1,188,367)    (741,821)   (604,457)
      Program:
        Regular.............................  3,565,824    3,714,477   4,008,183
        Consolidation.......................    196,823      137,635     213,849
        Reestimate of Prior Year Costs......    776,001  (4,727,793)
        Non-Contractual Modifications \2\...                               4,420
                                            -----------  -----------  ----------
          Subtotal, Program.................  4,538,648    (875,681)   4,226,451

    [[Page 370]]

          Total FFEL:.......................  3,350,282  (1,617.502)   3,621,994
    Direct Loans:
      Program:
        Regular.............................  (715,953)    (979,179) (1,044.966)
        Consolidation.......................  (352,697)    (664,024)   (369,3640
        Reestimate of Prior Year Costs......(2,442,286)      481,223
        Non-Contractual Modification \2\....                               2,596
          Total, Direct Loans...............(3,510,936)  (1,161,980) (1,411,735)
    Administration:
      FFEL :\3\.............................     48,000       48,000      49,636
      Student Aid \4\.......................    735,000      770,000     780,000
                                            -----------  -----------  ----------
        Subtotal, Administration............    783,000      818,000     829,636
        Total, FFEL and Direct Loans........    622,346  (1,961,482) (3,039,896)
    Program Cost Outlays:
    FFEL:
      Liquidating \1\.......................(1,636,701)    (699,345)   (604,457)
      Program:
        Regular.............................  3,333,312    3,445,578   3,447,111
        Consolidation.......................    196,823      137,409     213,499
        Reestimate of Prior Year Costs......    776,000  (4,727,793)
        Non-Contractual Modification \2\....                               4,420
          Subtotal, Program.................  4,306,135  (1,144,806)   3,665,029
          Total, FFEL.......................  2,669,434   (1,844,15)   3,060,572
    Direct Loans:
      Program:
        Regular.............................  (715,953)    (979,179) (1,044,966)
        Consolidation.......................  (352,697)    (664,024)   (369,364)
        Reestimate of Prior Year Costs......(2,442,286)      481,223
        Non-Contractual Modifications \2\...                               2,596
          Total, Direct Loans...............(3,510,936)  (1,161,980) (1,411,735)
    Administration:
      FFEL \3\..............................     38,038       56,092      49,808
      Student Aid \4\.......................    648,696      719,495     777,164
                                            -----------  -----------  ----------
        Subtotal, Administration............    686,734      775,587     826,972
        Total, FFEL and Direct Loans........  (154,768)  (2,230,544)   2,475,810
        \1\ Liquidating account reflects loans made prior to 1992.
        \2\ Reflect the costs or savings associated with policy changes that
    would affect the terms of existing loans.
        \3\ Reflects annual discretionary appropriation.
        \4\ Supports account maintenance fee payments to FFEL guaranty agencies,
    Direct Loan origination and servicing, and a range of administrative
    activities such as application printing, mailing, and processing that are
    common to all Federal student financial assistance programs.

       Summary of Loans Available (net commitments in millions of dollars) \1\

    ----------------------------------------------------------------------------
                                             2000 actual   2001 est.   2002 est.
    ----------------------------------------------------------------------------
    FFEL:
      Stafford..............................      11,259      11,436      11,683
      Unsubsidized Stafford.................       9,126       9,907      10,606
      PLUS..................................       2,326       2,560       2,821
                                               ---------   ---------  ----------
        Subtotal............................      22,711      23,903      25,111
      Consolidation.........................       5,695       5,948       6,083
                                               ---------   ---------  ----------
        Total, FFEL.........................      28,407      29,851      31,193
    Direct Loans:
      Stafford..............................       5,366       5,442       5,575
      Unsubsidized Stafford.................       3,807       4,129       4,420
      PLUS..................................       1,175       1,290       1,419
                                               ---------   ---------  ----------
        Subtotal............................      10,347      10,860      11,414
        Consolidation.......................       5,369       8,290       5,307
                                               ---------   ---------  ----------
        Total, Direct Loans.................      15,717      19,150      16,721
        Total, All Loans....................      44,124      49,001      47,914
    ---------------------------------------------------------------------------
        \1\ Net commitments equal gross commitments minus loan cancellations.

                           Number of Loans (In thousands)

    ----------------------------------------------------------------------------
                                             2000 actual   2001 est.   2002 est.
    ----------------------------------------------------------------------------
    FFEL:
      Stafford..............................       3,293       3,345       3,377
      Unsubsidized Stafford.................       2,244       2,408       2,524
      PLUS..................................         342         366         388
                                               ---------   ---------  ----------
        Subtotal............................       5,879       6,119       6,289
      Consolidation.........................         298         306         309
                                               ---------   ---------  ----------
        Total, FFEL.........................       6,176       6,425       6,598
    Direct Loans:
      Stafford..............................       1,552       1,535       1,553
      Unsubsidized Stafford.................       1,010       1,028       1,078
      PLUS..................................         177         183         193
                                               ---------   ---------  ----------
        Subtotal............................       2,739       2,745       2,825
      Consolidation.........................         272         419         275
                                               ---------   ---------  ----------
        Total, Direct Loans.................       3,011       3,164       3,101
        Total, All Loans....................       9,187       9,589       9,699
    ---------------------------------------------------------------------------

                        Average Loan Size (in whole dollars)

    ----------------------------------------------------------------------------
                                             2000 actual   2001 est.   2002 est.
    ----------------------------------------------------------------------------
    FFEL:
      Stafford..............................       3,419       3,418       3,460
      Unsubsidized Stafford.................       4,066       4,115       4,202
      PLUS..................................       6,811       7,002       7,276
                                               ---------   ---------  ----------
        Weighted Average, without
          Consolidations....................       3,863       3,906       3,993
                                               ---------   ---------  ----------
      Consolidation.........................      19,122      19,429      19,666
                                               ---------   ---------  ----------
        Weighted Average, FFEL..............       4,599       4,646       4,728
    Direct Loans:
      Stafford..............................       3,457       3,545       3,589
      Unsubsidized Stafford.................       3,771       4.017       4,099
      PLUS..................................       6,643       7.056       7,335
                                               ---------   ---------  ----------
        Weighted Average, Direct Loans......       3,778       3,956       4,040
                                               ---------   ---------  ----------
      Consolidation.........................      19,747      19,785      19,265
                                               ---------   ---------  ----------
        Weighted Average, Direct Loans......       5,221       6,052       5,393
        Weighted Average, All Loans.........       4,803       5,110       4,940
    ---------------------------------------------------------------------------

                Summary of Subsidy Rates, Default and Interest Rates

    ----------------------------------------------------------------------------
                                             2000 actual   2001 est.   2002 est.
    ----------------------------------------------------------------------------
    Subsidy Rates (in percent) \1\
    FFEL:
      Stafford..............................       24.92       22.46       23.15
      Unsubsidized Stafford.................        8.47        6.24        6.86
      PLUS..................................        5.80        3.83        3.92
      Consolidation.........................        4.29        2.31        3.51
        Weighted Average, FFEL..............       14.20       11.62       12.18
    Direct Loans:
      Stafford..............................        2.37        2.50        2.68
      Unsubsidized Stafford.................      -23.26      -22.38      -22.19
      PLUS..................................      -18.07      -16.38      -16.21
        Consolidation.......................       -7.85       -8.01       -6.96
        Weighted Average, Direct Loans......       -9.09       -8.82       -8.73
    Default Rates (in percent) \2\
    FFEL:
      Stafford..............................       15.68       15.80       15.80
      Unsubsidized Stafford.................       14.63       14.74       14.85
      PLUS..................................        9.19        9.38        9.57
        Weighted Average, FFEL..............       16.70       16.72       16.67
    Direct Loans:
      Stafford..............................       14.68       14.80       14.81
      Unsubsidized Stafford.................       14.02       14.13       14.25
      PLUS..................................        8.84        8.99        9.14
      Consolidation.........................       19.71       19.02       19.90
        Weighted Average, Direct Loans......       15.80       16.09       15.79
    Borrower Interest Rates (in percent) \3\
    FFEL:
      Stafford..............................        7.70        7.59        7.48
      Unsubsidized Stafford.................        7.70        7.59        7.48
      PLUS..................................        8.57        8.70        8.62
      Consolidation (reflects Sub and Unsub
        Stafford Only)......................        7.79        8.25        8.00
    Direct Loans:
      Stafford..............................        7.70        7.59        7.48
      Unsubsidized Stafford.................        7.70        7.59        7.48
      PLUS..................................        8.57        8.70        8.62
      Consolidation (reflects Sub and Unsub
        Stafford only)......................        7.69        8.00        7.88
    ---------------------------------------------------------------------------
        \1\ Subsidy rates represent the Federal portion of non-administrative
    costs--principally interest subsidies and defaults--associated with each
    borrowed dollar. For example, a $1,000 loan with Federal subsidy costs of
    $100 would have a subsidy rate of 10 percent.
        \2\ Default rates displayed in this table, which reflect projected
    defaults over the life of a loan cohort, are used in developing program cost
    estimates. The Department uses other rates based on defaults occurring in
    the first two years of repayment to determine institutional eligibility to
    participate in Federal loan programs. These two-year rates tend to be lower
    than those included in this table.
        \3\ These represent average borrower interest rates during repayment for
    a typical borrower under standard repayment over the life of the loan.

    [[Page 371]]

              Composition of Loan Collections (In thousands of dollars)

    ----------------------------------------------------------------------------
                                             2000 actual   2001 est.   2002 est.
    ----------------------------------------------------------------------------
    FFEL:
      Collections by Guaranty Agencies \1\..   2,596,201   2,045,315   2,095,001
      Collections by Department of Education
        \2\.................................     634,663     423,516     431,160
      Internal Revenue Service Tax Refund
        Offsets.............................     927,097     716,361     715,369
          Total, FFEL.......................   4,157,960   3,185,192   3,241,192
    Direct Loans:
      Collections by Department of Education
        \2\.................................     123,507     522,619     712,330
      Internal Revenue Service Tax Refund
        Offsets.............................      45,144      78,553     116,066
          Total, Direct Loans...............     168,652     601,172     828,396
        Total, FFEL and Direct Loan.........   4,326,612   3,786,364   4,069,926
    ---------------------------------------------------------------------------
        \1\ These figures show collections net of the amount agencies are
    allowed to retain under the provisions of the Higher Education Act of 1965.
    Agencies may retain 24 percent of most collections, and 18.5 percent of
    amounts collected through the consolidation of existing defaulted loans.
        \2\ These figures include amounts subsequently paid to Department
    contract collections agencies; contract collection costs total $110 million
    for 2000 ($81 million for FFEL and $29 million for Direct Loans); $171
    million for 2001 ($77 million for FFEL and $95 million for Direct Loans);
    and $207 million for 2002 ($78 million for FFEL and $129 million for Direct
    Loans).

             Projected Participation in Repayment Plans \1\ (in percent)

    ----------------------------------------------------------------------------
                                             2000 actual   2001 est.   2002 est.
    ----------------------------------------------------------------------------
    Standard:
        Percent of Loan Volume: \2\
          Stafford..........................       74.14       70.18       66.43
          Unsubsidized Stafford.............       70.24       66.17       62.34
          PLUS..............................       77.82       77.82       77.82
          Consolidation.....................       37.42       35.18       39.03
      Subsidy Rate (in percent):
          Stafford..........................        5.28        5.21        5.71
          Unsubsidized Stafford.............      -19.53      -18.92      -18.32
          PLUS..............................      -13.99      -13.14      -12.99
          Consolidation.....................       -0.83       -0.53        0.05
    Graduated: \3\
        Percent of Loan Volume \2\
          Stafford..........................       18.57       21.57       24.41
          Unsubsidized Stafford.............       20.67       23.66       26.47
          PLUS..............................       16.20       16.20       16.20
          Consolidation.....................       26.13       24.94       26.99
        Subsidy Rate (in percent):
          Stafford..........................       -6.50       -4.15       -3.55
          Unsubsidized Stafford.............      -34.52      -30.66      -29.92
          PLUS..............................      -33.14      -28.12      -27.83
          Consolidation.....................      -12.73      -13.94      -12.73
    Extended: \3\
        Percent of Loan Volume: \2\
          Stafford..........................        5.90        6.85        7.75
          Unsubsidized Stafford.............        7.51        8.59        9.61
          PLUS..............................        5.99        5.99        5.99
          Consolidation.....................       15.75       16.95       14.89
      Subsidy Rate (in percent):
          Stafford..........................       -5.87       -3.29       -2.72
          Unsubsidized Stafford.............      -33.70      -29.62      -28.98
          PLUS..............................      -32.67      -26.16      -25.92
          Consolidation.....................      -12.64      -12.74      -11.63
    Income-Contingent:
        Percent of Loan Volume: \2\
          Stafford..........................        1.40        1.40        1.40
          Unsubsidized Stafford.............        1.58        1.58        1.58
          Consolidation.....................       20.69       22.93       19.09
        Subsidy Rate (in percent):
          Stafford..........................        0.39        0.32        0.49
          Unsubsidized Stafford.............        0.30        0.12        0.23
          Consolidation.....................      -12.29       -9.53       -9.46
        \1\ For modeling purposes, all FFEL borrowers are assumed to have chosen
    Standard repayment. For Direct Loans, no data is included for the
    Alternative repayment plan, since borrowers are not expected to participate
    in this plan due to the flexibility available under the other options.
    Income-contingent repayment is not available for Direct PLUS borrowers.
        \2\ Percent of Loan Volume represents aggregate data. Individual
    borrowers may move between plans over time.
        \3\ Maximum terms under the Extended and Graduated repayment plans
    reflect the following ``classes'' based on borrower debt levels.

    ------------------------------------------------------------------------
                                                                  Percent of
                                                                    Volume
                                                                    Within
                                                                    Direct
                                                        Maximum    Extended
                        Debt Level                      Term (in      and
                                                         years)    Graduated
                                                                     Plans
                                                                  (Stafford)
                                                                     FY 01
    ------------------------------------------------------------------------
    Below $10,000....................................         12        5.73
    $10,000-$20,000..................................         15       13.24
    $20,000-$40,000..................................         20       32.00
    $40,000-$60,000..................................         25       20.74
    Above $60,000....................................         30       28.29
    ------------------------------------------------------------------------

        The Higher Education Amendments of 1998 broadened the availability
    of alternative repayment plans in the FFEL program. As noted in the
    Table above, data on the extent to which FFEL borrowers will take
    advantage of these plans is not yet available.

        Subsidy costs for the FFEL and Direct Loan programs are estimated in
    accordance with procedures set out in the Credit Reform Act of 1990.
    Subsidy costs for each loan type are estimated separately and, because
    costs can vary widely within a program depending on the characteristics
    of the individual borrower, cost estimates are aggregated from data for
    homogeneous groups within risk categories.

        Risk categories for Stafford and Unsubsidized Stafford Loans are
    based on the type of school attended by the borrower. Since PLUS loan
    borrowers are all parents, they are assumed to share similar risk
    profiles and are grouped together in a single category. For
    Consolidation Loans, risk categories distinguish between standard
    Consolidation Loans--in which borrowers in repayment consolidate a
    number of outstanding loans--and loans consolidated out of default.

        Default rates are a major cause of differences in subsidy between
    risk categories. The default rates in the following tables reflect
    estimates of the percent of borrowers who will default over the lifetime
    of the loans. These estimates are revised annually based on an analysis
    of default trends prepared each year by an independent auditor. Within
    each risk group, it is assumed that borrowers choosing similar repayment
    plans will have similar default rates, regardless of whether they borrow
    under the FFEL or Direct Loan program.

                      FFEL RISK CATEGORIES: STAFFORD LOANS

               Subsidy Rate (as a percentage of loan commitments)

                                         2000 actual  2001 est.   2002 est.
    Risk Categories:
      Category 1: 4 year college, 1st
        and 2nd year students...........       30.52       27.25       27.88
      Category 2: 4 year college, 3rd
        and 4th year students...........       21.63       20.33       21.05
      Category 3: 2 year college, all
        students........................       24.98       24.19       24.97
      Category 4: Proprietary school,
        all students....................       25.50       17.11       18.18
      Category 5: Graduate students.....       24.22       22.07       22.74

                        Gross Default Rates (in percent)

                                         2000 actual  2001 est.   2002 est.
    Risk Categories:
      Category 1: 4 year college, 1st
        and 2nd year students...........       19.26       19.43       19.53
      Category 2: 4 year college, 3rd
        and 4th year students...........       12.64       12.73       12.79
      Category 3: 2 year college, all
        students........................       30.52       30.74       30.85
      Category 4: Proprietary school,
        all students....................       44.60       45.11       45.53
      Category 5: Graduate students.....        8.19        8.24        8.26

                           UNSUBSIDIZED STAFFORD LOANS

               Subsidy Rate (as a percentage of loan commitments)

                                         2000 actual  2001 est.   2002 est.
    Risk Categories:
      Category 1: 4 year college, 1st
        and 2nd year students...........        9.79        6.73        7.44
      Category 2: 4 year college, 3rd
        and 4th year students...........        6.76        5.65        6.25
      Category 3: 2 year college, all
        students........................       12.74       10.37       11.06
      Category 4: Proprietary school,
        all students....................       17.51        8.58        9.54
      Category 5: Graduate students.....        6.92        5.56        6.11

                        Gross Default Rates (in percent)

                                         2000 actual  2001 est.   2002 est.
    Risk Categories:
      Category 1: 4 year college, 1st
        and 2nd year students...........       19.69       19.87       20.00
      Category 2: 4 year college, 3rd
        and 4th year students...........       12.48       12.57       12.67
      Category 3: 2 year college, all
        students........................       29.64       29.89       30.11
      Category 4: Proprietary school,
        all students....................       42.85       43.47       44.00
      Category 5: Graduate students.....        8.10        8.14        8.18

                                   PLUS LOANS

               Subsidy Rate (as a percentage of loan commitments)

                                         2000 actual  2001 est.   2002 est.
      All PLUS Loans....................        5.80        3.83        3.92

                        Gross Default Rates (in percent)

                                         2000 actual  2001 est.   2002 est.
      All PLUS Loans....................        9.19        9.38        9.57

    [[Page 372]]

                   DIRECT LOAN RISK CATEGORIES: STAFFORD LOANS

               Subsidy Rate (as a percentage of loan commitments)

                                         2000 actual  2001 est.   2002 est.
    Risk Categories:
      Category 1: 4 year college, 1st
        and 2nd year students...........        7.42        7.08        7.28
      Category 2: 4 year college, 3rd
        and 4th year students...........       -0.68        0.41        0.61
      Category 3: 2 year college, all
        students........................        5.52        7.24        7.59
      Category 4: Proprietary school,
        all students....................       11.50        4.24        4.84
      Category 5: Graduate students.....        0.99        1.12        1.25

                        Gross Default Rates (in percent)

                                         2000 actual  2001 est.   2002 est.
    Risk Categories:
      Category 1: 4 year college, 1st
        and 2nd year students...........       19.35       19.52       19.61
      Category 2: 4 year college, 3rd
        and 4th year students...........       12.49       12.58       12.64
      Category 3: 2 year college, all
        students........................       30.50       30.74       30.86
      Category 4: Proprietary school,
        all students....................       44.14       44.65       45.07
      Category 5: Graduate students.....        8.11        8.15        8.17

                           UNSUBSIDIZED STAFFORD LOANS

               Subsidy Rate (as a percentage of loan commitments)

                                         2000 actual  2001 est.   2002 est.
    Risk Categories:
      Category 1: 4 year college, 1st
        and 2nd year students...........      -23.04      -21.89      -21.43
      Category 2: 4 year college, 3rd
        and 4th year students...........      -24.74      -22.87      -22.79
      Category 3: 2 year college, all
        students........................      -16.90      -15.74      -15.60
      Category 4: Proprietary school,
        all students....................       -7.83      -14.36      -14.21
      Category 5: Graduate students.....      -24.96      -23.74      -23.55

                        Gross Default Rates (in percent)

                                         2000 actual  2001 est.   2002 est.
    Risk Categories:
      Category 1: 4 year college, 1st
        and 2nd year students...........       19.36       19.54       19.66
      Category 2: 4 year college, 3rd
        and 4th year students...........       12.27       12.36       12.45
      Category 3: 2 year college, all
        students........................       29.45       29.72       29.95
      Category 4: Proprietary school,
        all students....................       42.30       42.91       43.44
      Category 5: Graduate students.....        8.01        8.05        8.09

                                   PLUS LOANS

               Subsidy Rate (as a percentage of loan commitments)

                                         2000 actual  2001 est.   2002 est.
      All PLUS Loans....................      -18.07      -16.38      -16.21

                        Gross Default Rates (in percent)

                                         2000 actual  2001 est.   2002 est.
      All PLUS Loans....................        8.84        8.99        9.14

          Selected Program Costs and Offsets \1\ (in thousands of dollars)

    ----------------------------------------------------------------------------
                                            2000 actual    2001 est.   2002 est.
    ----------------------------------------------------------------------------
    FFEL:
    Interest costs:
    Interest benefits:
      FFEL Liquidating......................     16,481
      FFEL Program..........................  1,926,586    2,177,225   2,121,050
                                            -----------  -----------  ----------
        Total...............................  1,943,067    2,177,225   2,121,050
    Special allowance:
      FFEL Liquidating......................     75,539       46,228      25,013
      FFEL Program..........................    900,126      782,745     908,788
                                            -----------  -----------  ----------
        Total...............................    975,666      828,973     933,802
    Default costs and offsets:
    Default claims:
      FFEL Liquidating......................     86,351      115,419      62,716
      FFEL Program..........................  1,560,662    3,224,912   3,580,502
                                            -----------  -----------  ----------
        Total...............................  1,647,013    3,340,331   3,643,218
    Net default collections:
      FFEL Liquidating......................  2,008,624      981,554     756,467
      FFEL Program..........................  2,149,336    2,203,638   2,485,062
                                            -----------  -----------  ----------
        Total...............................  4,157,960    3,185,192   3,241,530
        Contract collection costs:..........
        FFEL Liquidating....................     40,912       42,060      33,584
      FFEL Program..........................     40,285       34,684      44,544
                                            -----------  -----------  ----------
        Total...............................     81,197       76,743      78,128
      Death, disability, and bankruptcy
          costs:
        FFEL Liquidating....................     34,858       44,768      36,502
        FFEL Program........................    274,703      371,638     421,800
                                            -----------  -----------  ----------
        Total...............................    309,560      416,406     458,303
    Fees:
      Borrower origination fees:............    750,082      706,622     739,777
      Lender origination fee................    125,014      117,770     123,296
      Sallie Mae offset fee:................     44,723       51,368      47,374
      Consolidation loan holder fees:.......    209,817      278,037     318,984
    Direct Loans:
      Borrower repayments:..................  5,820,065    6,636,713   8,335,706
          Borrower origination fees:........    358,336      286,635     183,226
          Net default Collections:..........    168,652      601,172     828,396
          Contact Collection Costs..........     28,546       94,699     129,074
    Administrative Costs:
      Federal administration:
          FFEL..............................     48,000       48,000      49,636
          Student Aid Management (SAM) \2\..    735,000      770,000     780,000
      Guaranty agency administrative
          payments:
          Account Maintenance Fee (included
            in SAM).........................    180,000      170,000     180,000
          Loan Issuance and Processing Fee..    149,799      176,814     185,782
    ----------------------------------------------------------------------------
        Details may not sum to totals due to rounding.
        \1\ This table represents explicit cash flows in the FFEL and Direct
    Loan financing accounts. Examples of these flows would include payments of
    FFEL interest benefits, default claims, and discharge claims, or collections
    on FFEL or Direct Loan defaults all of which involve explicit events that
    are reflected in the Department's financial systems as they occur. Non-
    events, such as Direct Loan interest benefits, defaults, or discharges,
    involve payments that are not received, and hence not recorded in the
    Department's financial systems in the same way. For that reason, these non-
    events are not included in this table.
        \2\ A number of expenses related to the administration of the student
    assistance programs are paid out of Student Aid Management funds. One of
    these expenses, account maintenance fee payments to guaranty agencies, is
    shown as a separate line.

                   Object Classification (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-0243-0-1-502      2000 actual   2001 est.   2002 est.
    ----------------------------------------------------------------------------

          Personnel compensation:

    11.1    Full-time permanent.............          33          37          39
    11.5    Other personnel compensation....           3           3           2
                                               ---------   ---------  ----------
    11.9      Total personnel compensation..          36          40          41
    12.1  Civilian personnel benefits.......           8           8           9
    21.0  Travel and transportation of
            persons.........................           6           6           5
    23.1  Rental payments to GSA............           6           7           5
    23.3  Communications, utilities, and
            miscellaneous charges...........          41          37          48
    24.0  Printing and reproduction.........          12           8           8
    25.1  Advisory and assistance services..           1           6           6
    25.2  Other services....................          30          25          32
    25.3  Purchases of goods and services
            from Government accounts........           5           1           3
    25.7  Operation and maintenance of
            equipment.......................         394         449         438
    31.0  Equipment.........................           5           1           2
    32.0  Land and structures...............          11          12           3
    41.0  Grants, subsidies, and
            contributions...................         180       1,329         180
                                               ---------   ---------  ----------
    99.9    Total new obligations...........         735       1,929         780
    ---------------------------------------------------------------------------

                                  Personnel Summary

    ----------------------------------------------------------------------------
    Identification code 91-0243-0-1-502      2000 actual   2001 est.   2002 est.
    ----------------------------------------------------------------------------
    1001  Total compensable workyears: Full-
            time equivalent employment......         554         571         571
    ---------------------------------------------------------------------------

              Federal Direct Student Loan Program, Program Account

                    (Legislative proposal, subject to PAYGO)

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-0243-4-1-502      2000 actual   2001 est.   2002 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
    00.03 Non contractual modification......                                   3
                                               ---------   ---------  ----------
    10.00   Total new obligations (object
              class 41.0)...................                                   3
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    22.00 New budget authority (gross)......                                   3
    23.95 Total new obligations.............                                  -3
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
          Mandatory:

    60.05   Appropriation (indefinite)......                                   3
    69.00 Offsetting collections (cash).....                                  -1
    69.27 Capital transfer to general fund..                                   1
                                               ---------   ---------  ----------
    69.90   Spending authority from
              offsetting collections (total
              mandatory)....................
                                               ---------   ---------  ----------
    70.00   Total new budget authority
              (gross).......................                                   3
    ----------------------------------------------------------------------------

    [[Page 373]]

        Change in unpaid obligations:
    73.10 Total new obligations.............                                   3
    73.20 Total outlays (gross).............                                  -3
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.97 Outlays from new mandatory
            authority.......................                                   3
    ----------------------------------------------------------------------------

        Offsets:
          Against gross budget authority and outlays:

    88.00   Offsetting collections (cash)
              from: Federal sources.........                                   1
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................                                   4
    90.00 Outlays...........................                                   4
    ---------------------------------------------------------------------------

    Summary of Loan Levels, Subsidy Budget Authority and Outlays by Program (in
                                millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-0243-4-1-502      2000 actual   2001 est.   2002 est.
    ----------------------------------------------------------------------------
        Direct loan subsidy (in percent):
    1320  Stafford..........................                                0.02
    1320  Unsubsidized Stafford.............                                0.02
                                               ---------   ---------  ----------
    1329    Weighted average subsidy rate...                                0.01
        Direct loan subsidy budget authority:
    1330  Stafford..........................                                   1
    1330  Unsubsidized Stafford.............                                   1
    1330  Non contractual modifications.....                                   2
                                               ---------   ---------  ----------
    1339    Total subsidy budget authority..                                   4
        Direct loan subsidy outlays:
    1340  Stafford..........................                                   1
    1340  Non contractual modifications.....                                   2
                                               ---------   ---------  ----------
    1349    Total subsidy outlays...........                                   3
    ---------------------------------------------------------------------------

             Federal Direct Student Loan Program, Financing Account

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-4253-0-3-502      2000 actual   2001 est.   2002 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
          Direct loans:

    01.01   Stafford........................       5,759       5,868       6,010
    01.02   Unsubsidized Stafford...........       4,210       4,598       4,923
    01.03   PLUS............................       1,338       1,447       1,593
    01.04   Consolidated....................       4,547       8,450       5,422
                                               ---------   ---------  ----------
    01.91     Subtotal, direct loans
                obligations.................      15,854      20,363      17,948
          Payment for consolidations:

    02.04   Consolidated....................          26          47          31
    03.01 Payment of contract collections...          29          95         129
    04.01 Interest payment to Treasury......       4,402       4,177       5,265
          Other obligations:

    08.01   Payment of negative subsidy to
              program account...............       1,316       1,663       1,432
    08.02   Payment of downward reestimate
              to program account............       2,158         531
    08.04 Payment of interest on downward
            reestimate to program account...         284         147
                                               ---------   ---------  ----------
    08.91   Subtotal, other obligations.....       3,758       2,341       1,432
                                               ---------   ---------  ----------
    10.00   Total new obligations...........      24,069      27,023      24,805
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    21.40 Unobligated balance carried
            forward, start of year..........           5          17
    22.00 New financing authority (gross)...      24,082      27,006      24,805
                                               ---------   ---------  ----------
    23.90   Total budgetary resources
              available for obligation......      24,087      27,023      24,805
    23.95 Total new obligations.............     -24,069     -27,023     -24,805
    24.40 Unobligated balance carried
            forward, end of year............          17
    ----------------------------------------------------------------------------

        New financing authority (gross), detail:
          Mandatory:

    67.15   Authority to borrow (indefinite)      19,612      22,687      19,381
    69.00 Offsetting collections (cash).....       7,539       8,684       9,347
    69.47 Portion applied to repay debt.....      -3,069      -4,365      -3,923
                                               ---------   ---------  ----------
    69.90   Spending authority from
              offsetting collections (total
              mandatory)....................       4,470       4,319       5,424
                                               ---------   ---------  ----------
    70.00   Total new financing authority
              (gross).......................      24,082      27,006      24,805
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
          Unpaid obligations, start of year:

    72.40   Unpaid obligations, start of
              year..........................       6,718       7,020       3,373
                                               ---------   ---------  ----------
    72.99     Obligated balance, start of
                year........................       6,718       7,020       3,373
    73.10 Total new obligations.............      24,069      27,023      24,805
    73.20 Total financing disbursements
            (gross).........................     -23,766     -30,670     -24,606
    73.40 Adjustments in expired accounts
            (net)...........................
          Unpaid obligations, end of year:

    74.40   Unpaid obligations, end of year.       7,020       3,373       3,573
                                               ---------   ---------  ----------
    74.99     Obligated balance, end of year       7,020       3,373       3,573
    87.00 Total financing disbursements
            (gross).........................      23,766      30,670      24,606
    ----------------------------------------------------------------------------

        Offsets:
          Against gross financing authority and
              financing disbursements:

            Offsetting collections (cash)
                from:
              Federal sources:
                Payments from program
                  account:

    88.00         Upward reestimate.........                  -1,085
    88.00         Interest on upward
                    reestimate..............                     -74
    88.25     Interest on uninvested funds..      -1,191
              Non-Federal sources:
                Stafford loans:

    88.40         Repayment of principal,
                    Stafford................      -1,825      -1,283      -1,647
    88.40         Interest received on
                    loans, Stafford.........        -404      -1,224      -1,428
    88.40         Fees, Stafford............        -188        -139         -83
    88.40         Repayment of principal,
                    Unsubsidized Stafford...      -1,156        -820      -1,101
    88.40         Interest received on
                    loans, Unsubsidized
                    Stafford................        -325        -831      -1,023
    88.40         Fees, Unsubsidized
                    Stafford................        -131        -103         -66
    88.40         Repayment of principal,
                    PLUS....................        -544        -257        -323
    88.40         Interest received on
                    loans, PLUS.............        -227        -347        -387
    88.40         Fees, PLUS................         -40         -45         -35
    88.40         Payment of principal,
                    Consolidated............        -955        -973      -1,342
    88.40         Interest received on
                    loans, Consolidated.....        -553      -1,503      -1,912
                                               ---------   ---------  ----------
    88.90       Total, offsetting
                  collections (cash)........      -7,539      -8,684      -9,347
    ----------------------------------------------------------------------------

        Net financing authority and financing
            disbursements:
    89.00 Financing authority...............      16,543      18,322      15,458
    90.00 Financing disbursements...........      16,229      21,986      15,259
    ---------------------------------------------------------------------------

                   Status of Direct Loans (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-4253-0-3-502      2000 actual   2001 est.   2002 est.
    ----------------------------------------------------------------------------
              STAFFORD
        Position with respect to appropriations act
                    limitation on obligations:
    1111  Limitation on direct loans........
    1131  Direct loan obligations exempt
            from limitation.................       5,759       5,868       6,010
                                               ---------   ---------  ----------
    1150    Total direct loan obligations...       5,759       5,868       6,010
    ----------------------------------------------------------------------------

        Cumulative balance of direct loans
                    outstanding:
    1210  Outstanding, start of year........      19,067      23,943      28,057
    1231  Disbursements: Direct loan
            disbursements...................       6,557       5,436       5,510
    1251  Repayments: Repayments and
            prepayments.....................      -1,825      -1,283      -1,647
    1261  Adjustments: Capitalized interest.         119
    1264  Write-offs for default: Other
            adjustments, net................          25         -39         -46
                                               ---------   ---------  ----------
    1290    Outstanding, end of year........      23,943      28,057      31,874
    ----------------------------------------------------------------------------

              UNSUBSIDIZED STAFFORD
        Position with respect to appropriations act
                    limitation on obligations:
    1131  Direct loan obligations exempt
            from limitation.................       4,210       4,598       4,923
                                               ---------   ---------  ----------
    1150    Total direct loan obligations...       4,210       4,598       4,923
    ----------------------------------------------------------------------------

        Cumulative balance of direct loans
                    outstanding:
    1210  Outstanding, start of year........      11,516      15,506      19,437
    1231  Disbursements: Direct loan
            disbursements...................       4,812       4,046       4,342
    1251  Repayments: Repayments and
            prepayments.....................      -1,156        -820      -1,101
    1261  Adjustments: Capitalized interest.         309         729         783
    1264  Write-offs for default: Other
            adjustments, net................          25         -24         -29
                                               ---------   ---------  ----------
    1290    Outstanding, end of year........      15,506      19,437      23,432
    ----------------------------------------------------------------------------

              PLUS
        Position with respect to appropriations act
                    limitation on obligations:
    1131  Direct loan obligations exempt
            from limitation.................       1,338       1,447       1,593
                                               ---------   ---------  ----------

    [[Page 374]]

    1150    Total direct loan obligations...       1,338       1,447       1,593
    ----------------------------------------------------------------------------

        Cumulative balance of direct loans
                    outstanding:
    1210  Outstanding, start of year........       2,737       3,642       4,618
    1231  Disbursements: Direct loan
            disbursements...................       1,396       1,255       1,380
    1251  Repayments: Repayments and
            prepayments.....................        -544        -257        -323
    1261  Adjustments: Capitalized interest.          35
    1264  Write-offs for default: Other
            adjustments, net................          18         -22         -28
                                               ---------   ---------  ----------
    1290    Outstanding, end of year........       3,642       4,618       5,647
    ----------------------------------------------------------------------------

              CONSOLIDATED
        Position with respect to appropriations act
                    limitation on obligations:
    1131  Direct loan obligations exempt
            from limitation.................       4,547       8,450       5,422
                                               ---------   ---------  ----------
    1150    Total direct loan obligations...       4,547       8,450       5,422
    ----------------------------------------------------------------------------

        Cumulative balance of direct loans
                    outstanding:
    1210  Outstanding, start of year........      11,655      14,622      21,965
    1231  Disbursements: Direct loan
            disbursements...................       3,618       8,290       5,307
    1251  Repayments: Repayments and
            prepayments.....................        -955        -973      -1,342
    1261  Adjustments: Capitalized interest.         269          88          60
    1264  Write-offs for default: Other
            adjustments, net................          35         -62         -90
                                               ---------   ---------  ----------
    1290    Outstanding, end of year........      14,622      21,965      25,900
    ---------------------------------------------------------------------------

                                 Balance Sheet (in millions of dollars)

    -----------------------------------------------------------------------------------------------
    Identification code   91-4253-0-3-502    1999 actual    2000 actual     2001 est.      2002 est.
    -----------------------------------------------------------------------------------------------
        ASSETS:
    1101  Federal assets: Fund balances with
            Treasury........................      -6,718          7,020         3,373          3,573
          Net value of assets related to
              post-1991 direct loans
              receivable:

            Direct loans receivable, gross:
    1401      Stafford......................      19,698         23,943        28,057         31,875
    1401      Unsubsidized Stafford.........      11,216         15,505        19,437         23,432
    1401      PLUS..........................       2,848          3,643         4,618          5,647
    1401      Consolidated..................      12,067         14,622        21,965         25,899
            Interest receivable:
    1402      Interest receivable, Stafford.         333            405           474            539
    1402      Interest receivable, Unsub
                Stafford....................         405            516           647            780
    1402      Interest receivable, PLUS.....       1,965          2,513         3,186          3,896
    1402      Interest receivable,
                Consolidated................         427            518           777            917
    1405    Allowance for subsidy cost (-)..      -1,558          2,585         3,321          2,927
                                            ------------ --------------  ------------  -------------
    1499      Net present value of assets
                related to direct loans.....      47,401         64,250        82,482         95,912
                                            ------------ --------------  ------------  -------------
    1999    Total assets....................      40,683         71,270        85,855         99,485
        LIABILITIES:
    2103  Federal liabilities: Debt.........      52,070         68,612        86,935        102,393
                                            ------------ --------------  ------------  -------------
    2999    Total liabilities...............      52,070         68,612        86,935        102,393
        NET POSITION:
    3100  Appropriated capital..............     -11,386          2,657        -1,079         -2,909
                                            ------------ --------------  ------------  -------------
    3999    Total net position..............     -11,386          2,657        -1,079         -2,909
                                            ------------ --------------  ------------  -------------
    4999  Total liabilities and net position      40,684         71,269        85,856         99,484
    -----------------------------------------------------------------------------------------------

        As required by the Federal Credit Reform Act of 1990, this non-
    budgetary account records all cash flows to and from the Government
    resulting from Direct Loans. The amounts in this account are a means of
    financing and are not included in the budget totals.

             Federal Direct Student Loan Program, Financing Account

                    (Legislative proposal, subject to PAYGO)

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-4253-4-3-502      2000 actual   2001 est.   2002 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
          Other obligations:

    08.01   Payment of negative subsidy to
              program account...............                                  -2
                                               ---------   ---------  ----------
    10.00   Total new obligations...........                                  -2
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    22.00 New financing authority (gross)...                                   1
    23.95 Total new obligations.............                                   2
    24.40 Unobligated balance carried
            forward, end of year............                                   3
    ----------------------------------------------------------------------------

        New financing authority (gross), detail:
          Mandatory:

    67.15   Authority to borrow (indefinite)                                  -2
    69.00 Offsetting collections (cash).....                                   3
                                               ---------   ---------  ----------
    70.00   Total new financing authority
              (gross).......................                                   1
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    73.10 Total new obligations.............                                  -2
    73.20 Total financing disbursements
            (gross).........................                                   2
    87.00 Total financing disbursements
            (gross).........................                                  -2
    ----------------------------------------------------------------------------

        Offsets:
          Against gross financing authority and
              financing disbursements:

            Payments from program account:
    88.00     Offsetting collections (cash)
                from: Non Contractual
                Modification................                                  -3
    ----------------------------------------------------------------------------

        Net financing authority and financing
            disbursements:
    89.00 Financing authority...............                                  -2
    90.00 Financing disbursements...........                                  -5
    ---------------------------------------------------------------------------

                                 Balance Sheet (in millions of dollars)

    -----------------------------------------------------------------------------------------------
    Identification code   91-4253-4-3-502    1999 actual    2000 actual     2001 est.      2002 est.
    -----------------------------------------------------------------------------------------------
        LIABILITIES:
    2103  Federal liabilities: Debt.........                                                      -2
                                            ------------ --------------  ------------  -------------
    2999    Total liabilities...............                                                      -2
        NET POSITION:
    3100  Appropriated capital..............                                                       2
                                            ------------ --------------  ------------  -------------
    3999    Total net position..............                                                       2
    -----------------------------------------------------------------------------------------------

                  Federal Family Education Loan Program Account

        For Federal administrative expenses to carry out guaranteed student
    loans authorized by title IV, part B, of the Higher Education Act of
    1965, as amended, [$48,000,000] $49,636,000. (Department of Education
    Appropriations Act, 2001, as enacted by section 1(a)(1) of P.L. 106-
    554.)

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-0231-0-1-502      2000 actual   2001 est.   2002 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
    00.02 Guaranteed Loan Net Subsidy.......       3,763       3,852       4,218
    00.07 Upward reestimate.................         607
    00.08 Interest on reestimate............         169
          Administrative expenses:

    00.09   Administrative expenses due to
              limitations...................          48          48          50
                                               ---------   ---------  ----------
    10.00   Total new obligations...........       4,587       3,900       4,268
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    22.00 New budget authority (gross)......       4,624       3,900       4,268
    23.95 Total new obligations.............      -4,587      -3,900      -4,268
    23.98 Unobligated balance expiring or
            withdrawn.......................         -37
    ----------------------------------------------------------------------------

    [[Page 375]]

        New budget authority (gross), detail:
          Discretionary:

    40.00   Appropriation (Federal
              administration)...............          48          48          50
          Mandatory:

    60.05   Appropriation (indefinite)......       4,576       3,852       4,218
          Offsetting collections (cash):

    69.00   Offsetting collections (cash)--
              downward reestimate...........                   3,526
    69.00   Offsetting collections (cash)--
              interest on downward
              reestimate....................                   1,202
    69.27 Capital transfer to general fund..                  -4,728
                                               ---------   ---------  ----------
    69.90   Spending authority from
              offsetting collections (total
              mandatory)....................
                                               ---------   ---------  ----------
    70.00   Total new budget authority
              (gross).......................       4,624       3,900       4,268
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
          Unpaid obligations, start of year:

    72.40   Unpaid obligations, start of
              year..........................       1,032       1,275       1,535
                                               ---------   ---------  ----------
    72.99     Obligated balance, start of
                year........................       1,032       1,275       1,535
    73.10 Total new obligations.............       4,587       3,900       4,268
    73.20 Total outlays (gross).............      -4,344      -3,639      -3,708
          Unpaid obligations, end of year:

    74.40   Unpaid obligations, end of year.       1,275       1,535       2,095
                                               ---------   ---------  ----------
    74.99     Obligated balance, end of year       1,275       1,535       2,095
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.90 Outlays from new discretionary
            authority.......................          36          37          39
    86.93 Outlays from discretionary
            balances........................           2          19          11
    86.97 Outlays from new mandatory
            authority.......................       3,301       2,345       2,581
    86.98 Outlays from mandatory balances...       1,006       1,238       1,077
                                               ---------   ---------  ----------
    87.00   Total outlays (gross)...........       4,344       3,639       3,708
    ----------------------------------------------------------------------------

        Offsets:
          Against gross budget authority and outlays:

    88.00   Offsetting collections (cash)
              from: Federal sources.........                  -4,728
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................       4,624        -828       4,268
    90.00 Outlays...........................       4,344      -1,089       3,708
    ---------------------------------------------------------------------------

                     Summary of Budget Authority and Outlays

                            (in millions of dollars)

                                         2000 actual  2001 est.   2002 est.
    Enacted/requested:
      Budget Authority..................       4,624        -828       4,268
      Outlays...........................       4,345      -1,089       3,708
    Legislative proposal, subject to
        PAYGO:
      Budget Authority..................                                   8
      Outlays...........................                                   7
                                        ------------------------------------
    Total:
      Budget Authority..................       4,624        -828       4,276
      Outlays...........................       4,345      -1,089       3,715
                                        ====================================

    Summary of Loan Levels, Subsidy Budget Authority and Outlays by Program (in
                                millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-0231-0-1-502      2000 actual   2001 est.   2002 est.
    ----------------------------------------------------------------------------
        Guaranteed loan levels supportable by subsidy
                    budget authority:
    2150  Stafford..........................      10,761      12,877      13,152
    2150  Unsubsidized Stafford.............       8,875      11,382      12,186
    2150  PLUS..............................       2,279       2,943       3,244
    2150  Consolidated......................       4,588       5,958       6,093
                                               ---------   ---------  ----------
    2159    Total loan guarantee levels.....      26,503      33,160      34,675
        Guaranteed loan subsidy (in percent):
    2320  Stafford..........................       24.92       22.46       23.14
    2320  Unsubsidized Stafford.............        8.47        6.24        6.85
    2320  PLUS..............................        5.80        3.83        3.92
    2320  Consolidated......................        4.29        2.31        3.51
                                               ---------   ---------  ----------
    2329    Weighted average subsidy rate...       14.20       11.62       12.17
        Guaranteed loan subsidy budget authority:
    2330  Stafford..........................       2,682       2,892       3,043
    2330  Unsubsidized Stafford.............         752         710         834
    2330  PLUS..............................         132         113         127
    2330  Consolidated......................         197         138         214
    2330  Subsidy reestimate upward.........         776
    2330  Subsidy reestimate downward.......                  -4,728
                                               ---------   ---------  ----------
    2339    Total subsidy budget authority..       4,539        -875       4,218
        Guaranteed loan subsidy outlays:
    2340  Stafford..........................       2,517       2,665       2,647
    2340  Unsubsidized Stafford.............         690         672         692
    2340  PLUS..............................         126         109         106
    2340  Consolidated......................         197         137         213
    2340  Subsidy reestimate upward.........         776
    2340  Subsidy reestimate downward.......                  -4,728
                                               ---------   ---------  ----------
    2349    Total subsidy outlays...........       4,306      -1,145       3,658
    ----------------------------------------------------------------------------

        Administrative expense data:
    3510  Budget authority..................          48          48          50
    3590  Outlays...........................          38          56          50
    ---------------------------------------------------------------------------

        As required by the Federal Credit Reform Act of 1990, this program
    account records the subsidy costs associated with Federal Family
    Education Loans (FFEL), formerly guaranteed student loans (GSL),
    committed in 1992 and beyond, as well as certain administrative expenses
    of the program. Administrative expenses include discretionary expenses
    for salaries, expenses and overhead of employees working directly on the
    program. Beginning with the 1993 cohort, mandatory administrative costs,
    specifically contract collection costs, are included in the FFEL subsidy
    estimates of each year's cohort. Subsidy amounts are estimated on a net
    present value basis.

        A description of the FFEL program and accompanying tables are
    included under the Federal Direct Student Loan program account.

                   Object Classification (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-0231-0-1-502      2000 actual   2001 est.   2002 est.
    ----------------------------------------------------------------------------

          Personnel compensation:

    11.1    Full-time permanent.............          22          24          25
    11.3    Other than full-time permanent..           1
                                               ---------   ---------  ----------
    11.9      Total personnel compensation..          23          24          25
    12.1  Civilian personnel benefits.......           5           5           6
    21.0  Travel and transportation of
            persons.........................                       1           1
    23.1  Rental payments to GSA............           5           4           4
    23.3  Communications, utilities, and
            miscellaneous charges...........           2           2           2
    25.2  Other services....................                       1           4
    25.3  Purchases of goods and services
            from Government accounts........           1           1           1
    25.7  Operation and maintenance of
            equipment.......................           9           9           6
    31.0  Equipment.........................                       1           1
    32.0  Land and structures...............           2
    41.0  Grants, subsidies, and
            contributions...................       4,540       3,852       4,218
                                               ---------   ---------  ----------
    99.9    Total new obligations...........       4,587       3,900       4,268
    ---------------------------------------------------------------------------

                                  Personnel Summary

    ----------------------------------------------------------------------------
    Identification code 91-0231-0-1-502      2000 actual   2001 est.   2002 est.
    ----------------------------------------------------------------------------
    1001  Total compensable workyears: Full-
            time equivalent employment......         372         368         368
    ---------------------------------------------------------------------------

                  Federal Family Education Loan Program Account

                    (Legislative proposal, subject to PAYGO)

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-0231-4-1-502      2000 actual   2001 est.   2002 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
    00.02 Guaranteed Loan Net Subsidy.......                                   8
                                               ---------   ---------  ----------
    10.00   Total new obligations (object
              class 41.0)...................                                   8
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    22.00 New budget authority (gross)......                                   8
    23.95 Total new obligations.............                                  -8
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
          Mandatory:

    60.05   Appropriation (indefinite)......                                   8
                                                                               8
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    73.10 Total new obligations.............                                   8

    [[Page 376]]

    73.20 Total outlays (gross).............                                  -7
          Unpaid obligations, end of year:

    74.40   Unpaid obligations, end of year.                                   1
                                               ---------   ---------  ----------
    74.99     Obligated balance, end of year                                   1
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.97 Outlays from new mandatory
            authority.......................                                   7
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................                                   8
    90.00 Outlays...........................                                   7
    ---------------------------------------------------------------------------

    Summary of Loan Levels, Subsidy Budget Authority and Outlays by Program (in
                                millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-0231-4-1-502      2000 actual   2001 est.   2002 est.
    ----------------------------------------------------------------------------
        Guaranteed loan subsidy (in percent):
    2320  Stafford..........................                                0.02
    2320  Unsubsidized Stafford.............                                0.01
                                               ---------   ---------  ----------
    2329    Weighted average subsidy rate...                                0.01
        Guaranteed loan subsidy budget authority:
    2330  Stafford..........................                                   2
    2330  Unsubsidized Stafford.............                                   2
    2330  Non contractual modification......                                   4
                                               ---------   ---------  ----------
    2339    Total subsidy budget authority..                                   8
        Guaranteed loan subsidy outlays:
    2340  Stafford..........................                                   2
    2340  Unsubsidized Stafford.............                                   1
    2340  Non contractual modification......                                   4
                                               ---------   ---------  ----------
    2349    Total subsidy outlays...........                                   7
    ----------------------------------------------------------------------------

        Administrative expense data:
    3510  Budget authority..................
    3590  Outlays from new authority........
    ---------------------------------------------------------------------------

            Federal Family Education Loan Program, Financing Account

        Note.--The financing account includes all cash flows to and from the
    Government from guaranteed student loans committed after 1991.

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-4251-0-3-502      2000 actual   2001 est.   2002 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
          Stafford loans:

    01.01   Interest benefits...............       1,926       2,177       2,121
    01.02   Special allowance...............         799         387         434
    01.03   Default claims..................         748       1,375       1,460
    01.04   Death, disability, and
              bankruptcy claims.............         123         129         138
    01.07   Contract collection costs.......          26          20          25
    01.08   Loan Processing Fee.............          73          84          85
                                               ---------   ---------  ----------
    01.91     Subtotal, Stafford loans......       3,695       4,172       4,263
          Unsubsidized Stafford loans:

    02.02   Special allowance...............          82         254         320
    02.03   Default claims..................         407         830         983
    02.04   Death, disability, and
              bankruptcy claims.............          54          65          76
    02.07   Contract collection costs.......           3           5           7
    02.08   Loan Processing Fee.............          61          74          79
                                               ---------   ---------  ----------
    02.91     Subtotal, Unsubsidized
                Stafford loans..............         607       1,228       1,465
          PLUS loans:

    03.02   Special allowance...............          11          21          18
    03.03   Default claims..................          70         125         145
    03.04   Death, disability, and
              bankruptcy claims.............          56          59          66
    03.07   Contract Collection Costs.......           1           2           2
    03.08   Loan Processing Fee.............          16          19          21
                                               ---------   ---------  ----------
    03.91     Subtotal, PLUS loans..........         154         226         252
          SLS loans:

    04.02   Special allowance...............           2
    04.03   Default claims..................          49          93          66
    04.04   Death, disability and bankruptcy
              claims........................           9           7           7
    04.07   Contract collection costs.......           7           4           5
                                               ---------   ---------  ----------
    04.91     Subtotal, SLS loans...........          67         104          78
          Consolidation loans:

    05.02   Special allowance...............           6         120         136
    05.03   Default claims..................         286         802         927
    05.04   Death, disability, and
              bankruptcy claims.............          34         111         135
    05.07   Contract collection costs.......           3           4           6
                                               ---------   ---------  ----------
    05.91     Subtotal, Consolidations loans         329       1,037       1,204
    08.02 Downward reestimate...............                   3,526
    08.04 Interest on downward reestimate...                   1,202
                                               ---------   ---------  ----------
    08.91   Direct Program by Activities--
              Subtotal (1 level)............                   4,728
                                               ---------   ---------  ----------
    10.00   Total new obligations...........       4,852      11,495       7,262
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    21.40 Unobligated balance carried
            forward, start of year..........       4,990       8,250       4,165
    22.00 New financing authority (gross)...       8,112       7,410       7,762
                                               ---------   ---------  ----------
    23.90   Total budgetary resources
              available for obligation......      13,102      15,660      11,927
    23.95 Total new obligations.............      -4,852     -11,495      -7,262
    24.40 Unobligated balance carried
            forward, end of year............       8,250       4,165       4,664
    ----------------------------------------------------------------------------

        New financing authority (gross), detail:
          Mandatory:

    69.00   Offsetting collections (cash)...       8,112       7,410       7,762
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
          Unpaid obligations, start of year:

    72.40   Unpaid obligations, start of
              year..........................       2,152       1,361       3,224
                                               ---------   ---------  ----------
    72.99     Obligated balance, start of
                year........................       2,152       1,361       3,224
    73.10 Total new obligations.............       4,852      11,495       7,262
    73.20 Total financing disbursements
            (gross).........................      -5,643      -9,632      -8,450
          Unpaid obligations, end of year:

    74.40   Unpaid obligations, end of year.       1,361       3,224       2,037
                                               ---------   ---------  ----------
    74.99     Obligated balance, end of year       1,361       3,224       2,037
    87.00 Total financing disbursements
            (gross).........................       5,643       9,632       8,450
    ----------------------------------------------------------------------------

        Offsets:
          Against gross financing authority and
              financing disbursements:

            Offsetting collections (cash)
                from:
              Federal sources:
                Payments from program
                  account:

    88.00         Stafford loans............      -2,518      -2,665      -2,647
    88.00         Unsubsidized Stafford.....        -690        -672        -692
    88.00         PLUS loans................        -126        -109        -106
    88.00         Consolidated loans........        -197        -137        -213
    88.00         Upward reestimate.........        -607
    88.00         Interest on upward
                    reestimate..............        -169
    88.25     Interest on uninvested funds..        -500        -440        -359
              Non-Federal sources:
                Student Loans: Stafford,
                  Unsubsidized Stafford,
                  PLUS, SLS & Consolidation:

    88.40         Stafford recoveries on
                    defaults................      -1,585      -1,192      -1,266
    88.40         Stafford origination fees.        -438        -399        -404
    88.40         Stafford Sallie Mae offset
                    fees....................         -25         -28         -25
    88.40         Unsubsidized Stafford
                    recoveries on defaults..        -159        -440        -536
    88.40         Unsubsidized Stafford
                    origination fees........        -349        -339        -364
    88.40         Unsubsidized Stafford
                    Sallie Mae offset fees..         -13         -17         -17
    88.40         PLUS recoveries on
                    defaults................         -56         -65         -75
    88.40         PLUS origination fees.....         -88         -86         -95
    88.40         PLUS Sallie Mae offset
                    fees....................          -5          -6          -6
    88.40         SLS recoveries on defaults        -187        -131        -128
    88.40         SLS Sallie Mae offset fees          -1          -1
    88.40         Consolidation recoveries
                    on defaults.............        -162        -375        -480
    88.40         Consolidation origination
                    fees....................         -27         -30         -30
    88.40         Consolidated loan holders
                    fee.....................        -210        -278        -319
                                               ---------   ---------  ----------
    88.90       Total, offsetting
                  collections (cash)........      -8,112      -7,410      -7,762
    ----------------------------------------------------------------------------

        Net financing authority and financing
            disbursements:
    89.00 Financing authority...............
    90.00 Financing disbursements...........      -2,469       2,222         688
    ---------------------------------------------------------------------------

    [[Page 377]]

                 Status of Guaranteed Loans (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-4251-0-3-502      2000 actual   2001 est.   2002 est.
    ----------------------------------------------------------------------------
              STAFFORD
        Position with respect to appropriations act
                    limitation on commitments:
    2111  Limitation on guaranteed loans
            made by private lenders.........
    2131  Guaranteed loan commitments exempt
            from limitation.................      12,074      12,877      13,152
                                               ---------   ---------  ----------
    2150    Total guaranteed loan
              commitments...................      12,074      12,877      13,152
    ----------------------------------------------------------------------------

        Cumulative balance of guaranteed loans
                    outstanding:
    2210  Outstanding, start of year........      55,684      60,388      62,832
    2231  Disbursements of new guaranteed
            loans...........................      10,298      11,414      11,552
    2251  Repayments and prepayments........      -4,473      -7,538      -8,817
          Adjustments:

    2261    Terminations for default that
              result in loans receivable....        -998      -1,303      -1,472
    2263    Terminations for default that
              result in claim payments......        -123        -129        -138
                                               ---------   ---------  ----------
    2290    Outstanding, end of year........      60,388      62,832      63,957
    ----------------------------------------------------------------------------

        Memorandum:
    2299  Guaranteed amount of guaranteed
            loans outstanding, end of year..      60,388      62,832      63,957
    ----------------------------------------------------------------------------

        Addendum:
          Cumulative balance of defaulted guaranteed
              loans that result in loans receivable:

    2310    Outstanding, start of year......       3,148       2,446       2,455
    2331    Disbursements for guaranteed
              loan claims...................         998       1,303       1,472
    2351    Repayments of loans receivable..      -1,340      -1,192      -1,266
    2361    Write-offs of loans receivable..        -112        -102        -106
    2364    Other adjustments, net..........        -248
                                               ---------   ---------  ----------
    2390      Outstanding, end of year......       2,446       2,455       2,555
    ----------------------------------------------------------------------------

              UNSUBSIDIZED STAFFORD
        Position with respect to appropriations act
                    limitation on commitments:
    2131  Guaranteed loan commitments exempt
            from limitation.................      10,128      11,382      12,186
                                               ---------   ---------  ----------
    2150    Total guaranteed loan
              commitments...................      10,128      11,382      12,186
    ----------------------------------------------------------------------------

        Cumulative balance of guaranteed loans
                    outstanding:
    2210  Outstanding, start of year........      30,537      36,361      41,840
    2231  Disbursements of new guaranteed
            loans...........................       8,181       9,673      10,389
    2251  Repayments and prepayments........      -1,759      -3,349      -4,410
          Adjustments:

    2261    Terminations for default that
              result in loans receivable....        -544        -780        -977
    2263    Terminations for default that
              result in claim payments......         -54         -65         -76
                                               ---------   ---------  ----------
    2290    Outstanding, end of year........      36,361      41,840      46,766
    ----------------------------------------------------------------------------

        Memorandum:
    2299  Guaranteed amount of guaranteed
            loans outstanding, end of year..      36,361      41,840      46,766
    ----------------------------------------------------------------------------

        Addendum:
          Cumulative balance of defaulted guaranteed
              loans that result in loans receivable:

    2310    Outstanding, start of year......         748       1,050       1,331
    2331    Disbursements for guaranteed
              loan claims...................         544         780         977
    2351    Repayments of loans receivable..        -134        -440        -536
    2361    Write-offs of loans receivable..         -49         -59         -75
    2364    Other adjustments, net..........         -59
                                               ---------   ---------  ----------
    2390      Outstanding, end of year......       1,050       1,331       1,697
    ----------------------------------------------------------------------------

              PLUS
        Position with respect to appropriations act
                    limitation on commitments:
    2131  Guaranteed loan commitments exempt
            from limitation.................       2,626       2,943       3,244
                                               ---------   ---------  ----------
    2150    Total guaranteed loan
              commitments...................       2,626       2,943       3,244
    ----------------------------------------------------------------------------

        Cumulative balance of guaranteed loans
                    outstanding:
    2210  Outstanding, start of year........       6,630       7,470       8,553
    2231  Disbursements of new guaranteed
            loans...........................       2,064       2,466       2,718
    2251  Repayments and prepayments........      -1,075      -1,205      -1,460
          Adjustments:

    2261    Terminations for default that
              result in loans receivable....         -93        -119        -145
    2263    Terminations for default that
              result in claim payments......         -56         -59         -66
                                               ---------   ---------  ----------
    2290    Outstanding, end of year........       7,470       8,553       9,600
    ----------------------------------------------------------------------------

        Memorandum:
    2299  Guaranteed amount of guaranteed
            loans outstanding, end of year..       7,470       8,553       9,600
    ----------------------------------------------------------------------------

        Addendum:
          Cumulative balance of defaulted guaranteed
              loans that result in loans receivable:

    2310    Outstanding, start of year......         221         199         205
    2331    Disbursements for guaranteed
              loan claims...................          93         119         145
    2351    Repayments of loans receivable..         -47         -65         -75
    2361    Write-offs of loans receivable..         -51         -48         -52
    2364    Other adjustments, net..........         -17
                                               ---------   ---------  ----------
    2390      Outstanding, end of year......         199         205         223
    ----------------------------------------------------------------------------

              SLS
        Cumulative balance of guaranteed loans
                    outstanding:
    2210  Outstanding, start of year........       2,418       2,001       1,183
    2251  Repayments and prepayments........        -342        -723        -525
          Adjustments:

    2261    Terminations for default that
              result in loans receivable....         -66         -88         -71
    2263    Terminations for default that
              result in claim payments......          -9          -7          -7
                                               ---------   ---------  ----------
    2290    Outstanding, end of year........       2,001       1,183         580
    ----------------------------------------------------------------------------

        Memorandum:
    2299  Guaranteed amount of guaranteed
            loans outstanding, end of year..       2,001       1,183         580
    ----------------------------------------------------------------------------

        Addendum:
          Cumulative balance of defaulted guaranteed
              loans that result in loans receivable:

    2310    Outstanding, start of year......         606         458         408
    2331    Disbursements for guaranteed
              loan claims...................          66          88          71
    2351    Repayments of loans receivable..        -158        -131        -128
    2361    Write-offs of loans receivable..          -8          -7          -6
    2364    Other adjustments, net..........         -48
                                               ---------   ---------  ----------
    2390      Outstanding, end of year......         458         408         345
    ----------------------------------------------------------------------------

              CONSOLIDATED
        Position with respect to appropriations act
                    limitation on commitments:
    2131  Guaranteed loan commitments exempt
            from limitation.................       4,599       5,958       6,093
                                               ---------   ---------  ----------
    2150    Total guaranteed loan
              commitments...................       4,599       5,958       6,093
    ----------------------------------------------------------------------------

        Cumulative balance of guaranteed loans
                    outstanding:
    2210  Outstanding, start of year........      22,737      27,891      31,207
    2231  Disbursements of new guaranteed
            loans...........................       6,059       5,948       6,083
    2251  Repayments and prepayments........        -490      -1,784      -2,221
          Adjustments:

    2261    Terminations for default that
              result in loans receivable....        -381        -737        -924
    2263    Terminations for default that
              result in claim payments......         -34        -111        -135
                                               ---------   ---------  ----------
    2290    Outstanding, end of year........      27,891      31,207      34,010
    ----------------------------------------------------------------------------

        Memorandum:
    2299  Guaranteed amount of guaranteed
            loans outstanding, end of year..      27,891      31,207      34,010
    ----------------------------------------------------------------------------

        Addendum:
          Cumulative balance of defaulted guaranteed
              loans that result in loans receivable:

    2310    Outstanding, start of year......       1,060       1,190       1,516
    2331    Disbursements for guaranteed
              loan claims...................         381         737         924
    2351    Repayments of loans receivable..        -137        -375        -480
    2361    Write-offs of loans receivable..         -31         -36         -46
    2364    Other adjustments, net..........         -83
                                               ---------   ---------  ----------
    2390      Outstanding, end of year......       1,190       1,516       1,914
    ---------------------------------------------------------------------------

    [[Page 378]]

                                 Balance Sheet (in millions of dollars)

    -----------------------------------------------------------------------------------------------
    Identification code   91-4251-0-3-502    1999 actual    2000 actual     2001 est.      2002 est.
    -----------------------------------------------------------------------------------------------
        ASSETS:
    1101  Federal assets: Fund balances with
            Treasury........................       6,384          8,250         4,165          4,664
          Net value of assets related to
              post-1991 acquired defaulted
              guaranteed loans receivable:

    1501    Defaulted guaranteed loans
              receivable, gross.............       8,701          5,342         5,913          6,732
                                            ------------ --------------  ------------  -------------
    1599      Net present value of assets
                related to defaulted
                guaranteed loans............       8,701          5,342         5,913          6,732
                                            ------------ --------------  ------------  -------------
    1999    Total assets....................      15,085         13,592        10,078         11,396
        NET POSITION:
    3100  Appropriated capital..............      14,968         13,592        10,077         11,396
                                            ------------ --------------  ------------  -------------
    3999    Total net position..............      14,968         13,592        10,077         11,396
                                            ------------ --------------  ------------  -------------
    4999  Total liabilities and net position      15,085         13,592        10,077         11,396
    -----------------------------------------------------------------------------------------------

        As required by the Federal Credit Reform Act of 1990, this
    nonbudgetary account records all cash flows to and from the Government
    resulting from Federal Family Education Loans (FFEL), formerly
    guaranteed student loans (GSL), committed in 1992 and beyond. The
    amounts in this account are a means of financing and are not included in
    the budget totals.

            Federal Family Education Loan Program, Financing Account

                    (Legislative proposal, subject to PAYGO)

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-4251-4-3-502      2000 actual   2001 est.   2002 est.
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    22.00 New financing authority (gross)...                                   7
    24.40 Unobligated balance carried
            forward, end of year............                                   7
    ----------------------------------------------------------------------------

        New financing authority (gross), detail:
          Mandatory:

    69.00   Offsetting collections (cash)...                                   7
    ----------------------------------------------------------------------------

        Offsets:
          Against gross financing authority and
              financing disbursements:

            Offsetting collections (cash)
                from:
              Payments from program account:
                Federal sources:

    88.00         Stafford loans............                                  -2
    88.00         Unsubsidized Stafford.....                                  -1
    88.00         Scheduled payments from
                    program account for
                    noncontractual
                    modifications...........                                  -4
                                               ---------   ---------  ----------
    88.90       Total, offsetting
                  collections (cash)........                                  -7
    ----------------------------------------------------------------------------

        Net financing authority and financing
            disbursements:
    89.00 Financing authority...............
    90.00 Financing disbursements...........                                  -7
    ---------------------------------------------------------------------------

                                 Balance Sheet (in millions of dollars)

    -----------------------------------------------------------------------------------------------
    Identification code   91-4251-4-3-502    1999 actual    2000 actual     2001 est.      2002 est.
    -----------------------------------------------------------------------------------------------
        ASSETS:
    1101  Federal assets: Fund balances with
            Treasury........................                                                       7
                                            ------------ --------------  ------------  -------------
    1999    Total assets....................                                                       7
        NET POSITION:
    3100  Appropriated capital..............                                                       7
                                            ------------ --------------  ------------  -------------
    3999    Total net position..............                                                       7
                                            ------------ --------------  ------------  -------------
    4999  Total liabilities and net position                                                       7
    -----------------------------------------------------------------------------------------------

                Federal Family Education Loan Liquidating Account

        Note.--The following tables display the liquidating account, which
    includes all cash flows to and from the Government from guaranteed
    student loan commitments prior to 1992.

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-0230-0-1-502      2000 actual   2001 est.   2002 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
          Stafford loans:

    01.01   Interest benefits, net of
              origination fees..............          16
    01.02   Special allowance net of
              origination fees..............          72          44          23
    01.03   Default claims..................          72          97          56
    01.04   Death, disability, and
              bankruptcy claims.............          30          34          27
    01.07   Contract collection costs.......          31          34          28
                                               ---------   ---------  ----------
    01.91     Subtotal, Stafford loans......         221         209         134
          PLUS/SLS loans:

    02.01   Default claims..................          14          18           6
    02.02   Death, disability, and
              bankruptcy claims.............           5          11          10
    02.05   Contract collection costs.......           8           8           6
    02.06   Special allowance net of
              origination fees..............           3           2           2
                                               ---------   ---------  ----------
    02.91     Subtotal, PLUS/SLS loans......          30          39          24
                                               ---------   ---------  ----------
    10.00   Total new obligations...........         251         248         158
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    21.40 Unobligated balance carried
            forward, start of year..........       3,779         578
    22.00 New budget authority (gross)......         830         248         158
    22.40 Capital transfer to general fund..      -3,779        -578
                                               ---------   ---------  ----------
    23.90   Total budgetary resources
              available for obligation......         830         248         158
    23.95 Total new obligations.............        -251        -248        -158
    24.40 Unobligated balance carried
            forward, end of year............         578
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
          Mandatory:

    60.05   Appropriation (indefinite)......          96
    69.00 Offsetting collections (cash).....       2,018         990         762
    69.27 Capital transfer to general fund..      -1,284        -742        -604
                                               ---------   ---------  ----------
    69.90   Spending authority from
              offsetting collections (total
              mandatory)....................         734         248         158
                                               ---------   ---------  ----------
    70.00   Total new budget authority
              (gross).......................         830         248         158
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
          Unpaid obligations, start of year:

    72.40   Unpaid obligations, start of
              year..........................         172          42
                                               ---------   ---------  ----------
    72.99     Obligated balance, start of
                year........................         172          42
    73.10 Total new obligations.............         251         248         158
    73.20 Total outlays (gross).............        -383        -291        -158
          Unpaid obligations, end of year:

    74.40   Unpaid obligations, end of year.          42
                                               ---------   ---------  ----------
    74.99     Obligated balance, end of year          42
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.97 Outlays from new mandatory
            authority.......................                     248         158
    86.98 Outlays from mandatory balances...         383          42
                                               ---------   ---------  ----------
    87.00   Total outlays (gross)...........         383         291         158
    ----------------------------------------------------------------------------

        Offsets:
          Against gross budget authority and outlays:

            Offsetting collections (cash)
                from:
              Federal student loans:
                Non-Federal sources:

    88.40         Federal collections on
                    defaulted loans.........        -468        -190        -152
    88.40         Federal collections on
                    bankruptcies............          -8          -7          -5
    88.40         Offsets against Federal
                    tax refunds.............        -575        -235        -182
    88.40         Reimbursements from
                    guaranty agencies.......        -660        -400        -301
    88.40         Federal collections on
                    defaulted loans, PLUS/
                    SLS.....................        -126         -42         -33
    88.40         Federal collections on
                    bankruptcies, PLUS/SLS..          -1          -2          -1
    88.40         Offsets against Federal
                    tax refunds, PLUS/SLS...         -73         -42         -33
    88.40         Reimbursements from
                    guaranty agencies, PLUS/
                    SLS.....................        -107         -72         -55
                                               ---------   ---------  ----------
    88.90       Total, offsetting
                  collections (cash)........      -2,018        -990        -762
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................      -1,188        -742        -604

    [[Page 379]]

    90.00 Outlays...........................      -1,637        -699        -604
    ---------------------------------------------------------------------------

                 Status of Guaranteed Loans (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-0230-0-1-502      2000 actual   2001 est.   2002 est.
    ----------------------------------------------------------------------------
              STAFFORD LOANS
        Cumulative balance of guaranteed loans
                    outstanding:
    2210  Outstanding, start of year........      11,470       8,670       5,953
    2251  Repayments and prepayments........      -2,532      -2,574      -1,657
          Adjustments:

    2261    Terminations for default that
              result in loans receivable....        -238         -98         -65
    2263    Terminations for default that
              result in claim payments......         -30         -45         -37
                                               ---------   ---------  ----------
    2290    Outstanding, end of year........       8,670       5,953       4,194
    ----------------------------------------------------------------------------

        Memorandum:
    2299  Guaranteed amount of guaranteed
            loans outstanding, end of year..       8,670       5,953       4,194
    ----------------------------------------------------------------------------

        Addendum:
          Cumulative balance of defaulted guaranteed
              loans that result in loans receivable:

    2310    Outstanding, start of year......      14,737      13,579      12,768
    2331    Disbursements for guaranteed
              loan claims...................         238          98          65
    2351    Repayments of loans receivable..      -1,733        -523        -396
    2361    Write-offs of loans receivable..        -300        -277        -260
    2364    Other adjustments, net..........         637        -109         -81
                                               ---------   ---------  ----------
    2390      Outstanding, end of year......      13,579      12,768      12,096
    ----------------------------------------------------------------------------

              PLUS/SLS LOANS
        Cumulative balance of guaranteed loans
                    outstanding:
    2210  Outstanding, start of year........       1,855       1,444       1,112
    2251  Repayments and prepayments........        -360        -303        -159
          Adjustments:

    2261    Terminations for default that
              result in loans receivable....         -46         -18          -8
    2263    Terminations for default that
              result in claim payments......          -5         -11         -10
                                               ---------   ---------  ----------
    2290    Outstanding, end of year........       1,444       1,112         935
    ----------------------------------------------------------------------------

        Memorandum:
    2299  Guaranteed amount of guaranteed
            loans outstanding, end of year..       1,444       1,112         935
    ----------------------------------------------------------------------------

        Addendum:
          Cumulative balance of defaulted guaranteed
              loans that result in loans receivable:

    2310    Outstanding, start of year......       3,172       2,979       2,834
    2331    Disbursements for guaranteed
              loan claims...................          46          18           8
    2351    Repayments of loans receivable..        -311         -93         -71
    2361    Write-offs of loans receivable..         -53         -50         -47
    2364    Other adjustments, net..........         125         -20         -16
                                               ---------   ---------  ----------
    2390      Outstanding, end of year......       2,979       2,834       2,708
    ---------------------------------------------------------------------------

                            Statement of Operations (in millions of dollars)

    -----------------------------------------------------------------------------------------------
    Identification code   91-0230-0-1-502    1999 actual    2000 actual     2001 est.      2002 est.
    -----------------------------------------------------------------------------------------------
        Stafford:
    0111  Revenue...........................       1,019          1,711           832            639
    0112  Expense...........................        -585           -221          -211           -134
                                            ------------ --------------  ------------  -------------
    0115  Net income or loss (-)............         434          1,490           621            505
        PLUS/SLS:
    0121  Revenue...........................         169            307           158            123
    0122  Expense...........................         -66            -30           -38            -24
                                            ------------ --------------  ------------  -------------
    0125  Net income or loss (-)............         103            277           120             99
                                            ------------ --------------  ------------  -------------
    0191  Total revenues....................       1,188          2,018           990            762
                                            ------------ --------------  ------------  -------------
    0192  Total expenses....................        -651           -251          -249           -158
                                            ------------ --------------  ------------  -------------
    0195  Total income or loss (-)..........         537          1,767           741            604
                                            ------------ --------------  ------------  -------------
    0199  Total comprehensive income........         537          1,767           741            604
    -----------------------------------------------------------------------------------------------

                                 Balance Sheet (in millions of dollars)

    -----------------------------------------------------------------------------------------------
    Identification code   91-0230-0-1-502    1999 actual    2000 actual     2001 est.      2002 est.
    -----------------------------------------------------------------------------------------------
        ASSETS:
          Net value of assets related to
              pre-1992 direct loans
              receivable and acquired
              defaulted guaranteed loans
              receivable:

    1701    Defaulted guaranteed loans,
              gross.........................      10,591         16,560        15,928         15,437
                                            ------------ --------------  ------------  -------------
    1704      Defaulted guaranteed loans and
                interest receivable, net....      10,591         16,560        15,928         15,437
                                            ------------ --------------  ------------  -------------
    1799      Value of assets related to
                loan guarantees.............      10,591         16,560        15,928         15,437
                                            ------------ --------------  ------------  -------------
    1999    Total assets....................      10,707         16,560        15,928         15,437
        NET POSITION:
    3100  Appropriated capital..............      10,707         16,560        15,928         15,437
                                            ------------ --------------  ------------  -------------
    3999    Total net position..............      10,707         16,560        15,928         15,437
    -----------------------------------------------------------------------------------------------
        \1\ Excludes interest and premium collections on insured loans.

        As required by the Federal Credit Reform Act of 1990, this
    liquidating account records, for this program, all cash flows to and
    from the Government resulting from guaranteed student loans committed
    prior to 1992. This account is shown on a cash basis. All new loan
    activity in this program for 1992 and beyond is recorded in
    corresponding program and financing accounts.

                   Object Classification (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-0230-0-1-502      2000 actual   2001 est.   2002 est.
    ----------------------------------------------------------------------------
    25.2  Other services....................          40          42          33
    33.0  Investments and loans.............          85         115          63
    41.0  Grants, subsidies, and
            contributions...................          92          46          25
    42.0  Insurance claims and indemnities..          34          45          37
                                               ---------   ---------  ----------
    99.9    Total new obligations...........         251         248         158
    ---------------------------------------------------------------------------

                 OFFICE OF EDUCATIONAL RESEARCH AND IMPROVEMENT

                                  Federal Funds

    General and special funds:

          Education Research, Statistics, and [Improvement] Assessment

        For carrying out activities authorized by the Educational Research,
    Development, Dissemination, and Improvement Act of 1994, including part
    E; the National Education Statistics Act of 1994, [including sections
    411 and 412; section 2102 of title II, parts A, B, K and L and sections
    10102 and 10601 of title X, and part C of title XIII of the Elementary
    and Secondary Education Act of 1965, as amended, and title VI of Public
    Law 103-227, $732,721,000] $273,067,000: Provided, [That of the funds
    appropriated for part A of title X of the Elementary and Secondary
    Education Act of 1965, as amended, $5,000,000 shall be made available
    for a high school reform program of grants to State educational agencies
    to improve academic performance and provide technical skills training:
    Provided further, That of the funds appropriated for part A of title X
    of the Elementary and Secondary Education Act of 1965, as amended,
    $5,000,000 shall be made available to carry out part L of title X of the
    Act: Provided further, That of the amount available for part A of title
    X of the Elementary and Secondary Education Act of 1965, as amended,
    $5,000,000 shall be available for grants to State and local educational
    agencies, in collaboration with other agencies and organizations, for
    school dropout prevention programs designed to address the needs of
    populations or communities with the highest dropout rates: Provided
    further, That of the amount made available for part A of title X of the
    Elementary and Secondary Education Act of 1965, as amended, $50,000,000
    shall be made available to enable the Secretary of Education to award
    grants to develop, implement, and strengthen programs to teach American
    history (not social studies) as a separate subject within school
    curricula: Provided further,] That $53,000,000 of the amount available
    for the national education research institutes

    [[Page 380]]

    shall be allocated notwithstanding section 912(m)(1)(B-F) and
    subparagraphs (B) and (C) of section 931(c)(2) of Public Law 103-227
    [and $20,000,000 of that $53,000,000 shall be made available for the
    Interagency Education Research Initiative: Provided further, That of the
    funds appropriated for part A of title X of the Elementary and Secondary
    Education Act, as amended, $50,000,000 shall be available to demonstrate
    effective approaches to comprehensive school reform, to be allocated and
    expended in accordance with the instructions relating to this activity
    in the statement of managers on the conference report accompanying
    Public Law 105-78 and in the statement of the managers on the conference
    report accompanying Public Law 105-277: Provided further, That the funds
    made available for comprehensive school reform shall become available on
    July 1, 2001, and remain available through September 30, 2002, and in
    carrying out this initiative, the Secretary and the States shall support
    only approaches that show the most promise of enabling children to meet
    challenging State content standards and challenging State student
    performance standards based on reliable research and effective
    practices, and include an emphasis on basic academics and parental
    involvement: Provided further, That $139,624,000 of the funds for
    section 10101 of the Elementary and Secondary Education Act of 1965
    shall be available for the projects and in the amounts specified in the
    statement of the managers on the conference report accompanying this
    Act: Provided further, That of the funds appropriated under section
    10601 of title X of the Elementary and Secondary Education Act of 1965,
    as amended, $2,000,000 shall be used to conduct a violence prevention
    demonstration program: Provided further, That of the funds available for
    section 10601 of title X of the Elementary and Secondary Education Act
    of 1965, as amended, $150,000 shall be awarded to the Center for
    Educational Technologies to complete production and distribution of an
    effective CD-ROM product that would complement the ``We the People: The
    Citizen and the Constitution'' curriculum: Provided further, That, of
    the funds for title VI of Public Law 103-227 and notwithstanding the
    provisions of section 601(c)(1)(C) of that Act, $1,200,000 shall be
    available to the Center for Civic Education to conduct a civic education
    program with Northern Ireland and the Republic of Ireland and,
    consistent with the civics and Government activities authorized in
    section 601(c)(3) of Public Law 103-227, to provide civic education
    assistance to democracies in developing countries. The term ``developing
    countries'' shall have the same meaning as the term ``developing
    country'' in the Education for the Deaf Act]. (Department of Education
    Appropriations Act, 2001, as enacted by section 1(a)(1) of P.L. 106-
    554.)

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-1100-0-1-503      2000 actual   2001 est.   2002 est.
    ----------------------------------------------------------------------------
        Direct program:
          Obligations by program activity:

            Research, development and
                dissemination:
    00.01     Research and dissemination....         103         120         123
    00.02     Regional educational
                laboratories................          65          65          65
    00.03     Statistics....................          68          80          85
    00.04   Assessment......................          40          40
    00.05   Eisenhower professional
              development Federal activities          23          23
    00.06   Fund for the Improvement of
              Education.....................         242         341
    00.07   Javits gifted and talented
              education.....................           7           8
    00.08   Eisenhower regional mathematics
              and science education
              consortia.....................          15          15
    00.09   National writing project........           9          10
    00.10   Civic education.................          10          12
    00.11   International education exchange           7          10
                                               ---------   ---------  ----------
    01.00 Total direct program..............         589         724         273
    09.01 Reimbursable program..............           6           6           6
                                               ---------   ---------  ----------
    10.00 Total new obligations.............         595         730         279
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    21.40 Unobligated balance carried
            forward, start of year..........                       2
    22.00 New budget authority (gross)......         597         728         279
                                               ---------   ---------  ----------
    23.90   Total budgetary resources
              available for obligation......         597         730         279
    23.95 Total new obligations.............        -595        -730        -279
    24.40 Unobligated balance carried
            forward, end of year............           2
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
          Discretionary:

    40.00   Appropriation...................         597         733         273
    40.75   Reduction pursuant to P.L. 106-
              554 (Labor/HHS)...............                      -1
    40.76   Reduction pursuant to P.L. 106-
              113...........................          -6
    41.00   Transferred to other accounts...                     -10
                                               ---------   ---------  ----------
    43.00     Appropriation (total
                discretionary)..............         591         722         273
    68.00 Spending authority from offsetting
            collections: Offsetting
            collections (cash)..............           6           6           6
                                               ---------   ---------  ----------
    70.00   Total new budget authority
              (gross).......................         597         728         279
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
          Unpaid obligations, start of year:

    72.40   Unpaid obligations, start of
              year..........................         682         720         725
                                               ---------   ---------  ----------
    72.99     Obligated balance, start of
                year........................         682         720         725
    73.10 Total new obligations.............         595         730         279
    73.20 Total outlays (gross).............        -563        -725        -644
    73.40 Adjustments in expired accounts
            (net)...........................           5
          Unpaid obligations, end of year:

    74.40   Unpaid obligations, end of year.         720         725         360
                                               ---------   ---------  ----------
    74.99     Obligated balance, end of year         720         725         360
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.90 Outlays from new discretionary
            authority.......................          85         130          70
    86.93 Outlays from discretionary
            balances........................         478         595         574
                                               ---------   ---------  ----------
    87.00   Total outlays (gross)...........         563         725         644
    ----------------------------------------------------------------------------

        Offsets:
          Against gross budget authority and outlays:

    88.00   Offsetting collections (cash)
              from: Federal sources.........          -6          -6          -6
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................         591         722         273
    90.00 Outlays...........................         556         719         638
    ---------------------------------------------------------------------------

        The Administration is working with Congress to develop legislation
    reauthorizing the National Assessment of Educational Progress. When new
    authorizing legislation is enacted, resources for this program will be
    requested. See the ``Legislative proposal, not subject to PAYGO''
    schedule for additional details.

        Research and dissemination.--Funds support the activities of the
    five National Education Research Institutes, as well as interagency
    research focusing on large-scale educational improvements and teaching
    language minority students. Funds also support a variety of
    dissemination activities that make the best research-based information
    on educational practice available to educators, parents, and
    policymakers.

        Regional educational laboratories.--Funds support a network of 10
    regional educational laboratories responsible for promoting the use of
    broad-based systemic strategies to improve student achievement. The
    regional laboratories conduct applied research and development,
    dissemination, and technical assistance to address needs in their
    regions.

        Statistics.--Funds support the collection of statistics on
    educational institutions and on individuals to monitor trends in
    education. Funds also support a coordinated program of statistical
    services to assist States in the development of comparable databases and
    analyses of the implications of data.

                     Summary of Budget Authority and Outlays

                            (in millions of dollars)

                                         2000 actual  2001 est.   2002 est.
    Enacted/requested:
      Budget Authority..................         591         722         273
      Outlays...........................         557         719         638
    Legislative proposal, not subject to
        PAYGO:
      Budget Authority..................                                 109
      Outlays...........................                                  28
                                        ------------------------------------
    Total:
      Budget Authority..................         591         722         382
      Outlays...........................         557         719         666
                                        ====================================

    [[Page 381]]

                   Object Classification (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-1100-0-1-503      2000 actual   2001 est.   2002 est.
    ----------------------------------------------------------------------------

          Direct obligations:

    11.3    Personnel compensation: Other
              than full-time permanent......           1           1
    24.0    Printing and reproduction.......           2           2           1
    25.1    Advisory and assistance services           2           2
    25.2    Other services..................          70          82          70
    25.3    Purchases of goods and services
              from Government accounts......          29          43          25
    25.5    Research and development
              contracts.....................          95          95          92
    25.7    Operation and maintenance of
              equipment.....................           7           7           7
    41.0    Grants, subsidies, and
              contributions.................         381         490          76
    92.0    Undistributed...................           2           2           2
                                               ---------   ---------  ----------
    99.0      Subtotal, direct obligations..         589         724         273
    99.0  Reimbursable obligations..........           6           6           6
                                               ---------   ---------  ----------
    99.9    Total new obligations...........         595         730         279
    ---------------------------------------------------------------------------

                                  Personnel Summary

    ----------------------------------------------------------------------------
    Identification code 91-1100-0-1-503      2000 actual   2001 est.   2002 est.
    ----------------------------------------------------------------------------
    1001  Total compensable workyears: Full-
            time equivalent employment......          12          15           1
    ---------------------------------------------------------------------------

                  Education Research Statistics and Assessment

                  (Legislative proposal, not subject to PAYGO)

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-1100-2-1-503      2000 actual   2001 est.   2002 est.
    ----------------------------------------------------------------------------
        Direct program:
          Obligations by program activity:

    00.04   Assessment......................                                 109
                                               ---------   ---------  ----------
    01.00 Total direct program..............                                 109
    09.01 Reimbursable program..............                                   1
                                               ---------   ---------  ----------
    10.00 Total new obligations.............                                 110
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    22.00 New budget authority (gross)......                                 110
    23.95 Total new obligations.............                                -110
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
          Discretionary:

    40.00   Appropriation...................                                 109
    68.00 Spending authority from offsetting
            collections: Offsetting
            collections (cash)..............                                   1
                                               ---------   ---------  ----------
    70.00   Total new budget authority
              (gross).......................                                 110
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
    73.10 Total new obligations.............                                 110
    73.20 Total outlays (gross).............                                 -29
          Unpaid obligations, end of year:

    74.40   Unpaid obligations, end of year.                                  81
                                               ---------   ---------  ----------
    74.99     Obligated balance, end of year                                  81
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.90 Outlays from new discretionary
            authority.......................                                  29
    ----------------------------------------------------------------------------

        Offsets:
          Against gross budget authority and outlays:

    88.00   Offsetting collections (cash)
              from: Federal sources.........                                  -1
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................                                 109
    90.00 Outlays...........................                                  28
    ---------------------------------------------------------------------------

        Assessment.--The National Assessment of Educational Progress (NAEP)
    administers assessments and surveys to a sample of students in order to
    gather reliable information about educational attainment in important
    skill areas. Under the Administration's proposal, NAEP would continue to
    provide national, State and long-term trend information. In addition,
    Federal funds would pay for the costs of annual State NAEP in reading
    and mathematics at grades 4 and 8.

                   Object Classification (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-1100-2-1-503      2000 actual   2001 est.   2002 est.
    ----------------------------------------------------------------------------

          Direct obligations:

            Personnel compensation:
    11.1      Full-time permanent...........                                   1
    11.3      Other than full-time permanent                                   1
                                               ---------   ---------  ----------
    11.9        Total personnel compensation                                   2
    25.1    Advisory and assistance services                                   1
    25.2    Other services..................                                   2
    25.5    Research and development
              contracts.....................                                   2
    41.0    Grants, subsidies, and
              contributions.................                                 102
                                               ---------   ---------  ----------
    99.0      Subtotal, direct obligations..                                 109
    99.0  Reimbursable obligations..........                                   1
                                               ---------   ---------  ----------
    99.9    Total new obligations...........                                 110
    ---------------------------------------------------------------------------

                                  Personnel Summary

    ----------------------------------------------------------------------------
    Identification code 91-1100-2-1-503      2000 actual   2001 est.   2002 est.
    ----------------------------------------------------------------------------
    1001  Total compensable workyears: Full-
            time equivalent employment......                                  14
    ---------------------------------------------------------------------------

                             DEPARTMENTAL MANAGEMENT

                                  Federal Funds

    General and special funds:

                             Program Administration

        For carrying out, to the extent not otherwise provided, the
    Department of Education Organization Act, including rental of conference
    rooms in the District of Columbia and hire of two passenger motor
    vehicles, [$413,184,000] $424,212,000. (Department of Education
    Appropriations Act, 2001, as enacted by section 1(a)(1) of P.L. 106-
    554.)

                  Unavailable Collections (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-0800-0-1-503      2000 actual   2001 est.   2002 est.
    ----------------------------------------------------------------------------
    01.99 Balance, start of year............                       1           1
        Receipts:
    02.00 Contributions.....................           1
                                               ---------   ---------  ----------
    04.00 Total: Balances and collections...           1           1           1
                                               ---------   ---------  ----------
    07.99 Balance, end of year..............           1           1           1
    ---------------------------------------------------------------------------

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-0800-0-1-503      2000 actual   2001 est.   2002 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
    00.01 Program administration............         382         412         424
    00.02 Trust funds.......................           1
    09.01 Reimbursable program..............          10           1           1
                                               ---------   ---------  ----------
    10.00   Total new obligations...........         393         413         425
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    21.40 Unobligated balance carried
            forward, start of year..........           2
    22.00 New budget authority (gross)......         394         413         425
    22.21 Unobligated balance transferred to
            other accounts..................          -1
                                               ---------   ---------  ----------
    23.90   Total budgetary resources
              available for obligation......         395         413         425
    23.95 Total new obligations.............        -393        -413        -425
    23.98 Unobligated balance expiring or
            withdrawn.......................          -1
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
          Discretionary:

    40.00   Appropriation...................         384         413         424
    40.75   Reduction pursuant to P.L. 106-
              554 (Labor/HHS)...............                      -1
                                               ---------   ---------  ----------
    43.00     Appropriation (total
                discretionary)..............         384         412         424

    [[Page 382]]

    68.00 Spending authority from offsetting
            collections: Offsetting
            collections (cash)..............          10           1           1
                                               ---------   ---------  ----------
    70.00   Total new budget authority
              (gross).......................         394         413         425
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
          Unpaid obligations, start of year:

    72.40   Unpaid obligations, start of
              year..........................         138         148         128
                                               ---------   ---------  ----------
    72.99     Obligated balance, start of
                year........................         138         148         128
    73.10 Total new obligations.............         393         413         425
    73.20 Total outlays (gross).............        -367        -433        -415
    73.40 Adjustments in expired accounts
            (net)...........................         -16
          Unpaid obligations, end of year:

    74.40   Unpaid obligations, end of year.         148         128         138
                                               ---------   ---------  ----------
    74.99     Obligated balance, end of year         148         128         138
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.90 Outlays from new discretionary
            authority.......................         281         315         326
    86.93 Outlays from discretionary
            balances........................          86         119          89
                                               ---------   ---------  ----------
    87.00   Total outlays (gross)...........         367         433         415
    ----------------------------------------------------------------------------

        Offsets:
          Against gross budget authority and outlays:

    88.00   Offsetting collections (cash)
              from: Federal sources.........         -10          -1          -1
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................         384         412         424
    90.00 Outlays...........................         357         432         414
    ---------------------------------------------------------------------------

        The Program Administration account includes the direct Federal costs
    of providing grants and administering elementary and secondary
    education, bilingual education, Indian education, higher education,
    vocational and adult education, and special education programs, programs
    for persons with disabilities and a portion of the direct Federal costs
    for administering student financial aid programs. It also supports
    assessment, statistics, and research activities.

        In addition, this account includes the cost of providing centralized
    support and administrative services, overall policy development, and
    strategic planning for the Department. Included in the centralized
    activities are rent and mail services; telecommunciations; contractual
    services; financial management and accounting, including payments to
    schools, education agencies and other grant recipients, and preparation
    of auditable financial statements; information technology services;
    personnel management; budget formulation and execution; program
    evaluation; legal services; congressional and public relations; and
    intergovernmental affairs.

        Also included in this account are contributions from the public.
    Activities supported include Presidential Scholars, Satellite Town
    Meetings, School Recognition, and the Gifts and Bequests Miscellaneous
    Fund.

        Reimbursable program.--Reimbursements to this account are for
    providing administrative services to other agencies, recycling
    activities, and in-kind travel.

                   Object Classification (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-0800-0-1-503      2000 actual   2001 est.   2002 est.
    ----------------------------------------------------------------------------

          Direct obligations:

            Personnel compensation:
    11.1      Full-time permanent...........         155         187         195
    11.3      Other than full-time permanent          25           8           9
    11.5      Other personnel compensation..           4           4           3
                                               ---------   ---------  ----------
    11.9        Total personnel compensation         184         199         207
    12.1    Civilian personnel benefits.....          38          43          44
    21.0    Travel and transportation of
              persons.......................           7           7           7
    23.1    Rental payments to GSA..........          29          34          35
    23.3    Communications, utilities, and
              miscellaneous charges.........          12          13          13
    24.0    Printing and reproduction.......           3           6           6
    25.1    Advisory and assistance services           3           5           4
    25.2    Other services..................          21          23          23
    25.3    Purchases of goods and services
              from Government accounts......          11           9           8
    25.7    Operation and maintenance of
              equipment.....................          57          57          63
    26.0    Supplies and materials..........           3           3           3
    31.0    Equipment.......................          11          10           9
    32.0    Land and structures.............           4           3           2
                                               ---------   ---------  ----------
    99.0      Subtotal, direct obligations..         383         412         424
    99.0  Reimbursable obligations..........           9           1           1
    99.5  Below reporting threshold.........           1
                                               ---------   ---------  ----------
    99.9    Total new obligations...........         393         413         425
    ---------------------------------------------------------------------------

                                  Personnel Summary

    ----------------------------------------------------------------------------
    Identification code 91-0800-0-1-503      2000 actual   2001 est.   2002 est.
    ----------------------------------------------------------------------------
    1001  Total compensable workyears: Full-
            time equivalent employment......       2,659       2,755       2,755
    ---------------------------------------------------------------------------

                             Office for Civil Rights

        For expenses necessary for the Office for Civil Rights, as
    authorized by section 203 of the Department of Education Organization
    Act, [$76,000,000] $79,934,000. (Department of Education Appropriations
    Act, 2001, as enacted by section 1(a)(1) of P.L. 106-554.)

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-0700-0-1-751      2000 actual   2001 est.   2002 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
    00.01 Civil rights......................          71          76          80
                                               ---------   ---------  ----------
    10.00   Total new obligations...........          71          76          80
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    22.00 New budget authority (gross)......          71          76          80
    23.95 Total new obligations.............         -71         -76         -80
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
          Discretionary:

    40.00   Appropriation...................          71          76          80
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
          Unpaid obligations, start of year:

    72.40   Unpaid obligations, start of
              year..........................          20          23          16
                                               ---------   ---------  ----------
    72.99     Obligated balance, start of
                year........................          20          23          16
    73.10 Total new obligations.............          71          76          80
    73.20 Total outlays (gross).............         -68         -83         -79
          Unpaid obligations, end of year:

    74.40   Unpaid obligations, end of year.          23          16          17
                                               ---------   ---------  ----------
    74.99     Obligated balance, end of year          23          16          17
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.90 Outlays from new discretionary
            authority.......................          61          63          68
    86.93 Outlays from discretionary
            balances........................           7          20          11
                                               ---------   ---------  ----------
    87.00   Total outlays (gross)...........          68          83          79
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................          71          76          80
    90.00 Outlays...........................          68          83          79
    ---------------------------------------------------------------------------

        The Office for Civil Rights is responsible for ensuring that no
    person is unlawfully discriminated against on the basis of race, color,
    national origin, sex, disability, or age in the delivery of services or
    the provision of benefits in programs or activities of schools and
    institutions receiving financial assistance from the Department of
    Education. The authorities under which the Office for Civil Rights
    operates are Title VI of the Civil Rights Act of 1964 (racial and ethnic
    discrimination), Title IX of the Education Amendments of 1972 (sex

    [[Page 383]]

    discrimination), section 504 of the Rehabilitation Act of 1973
    (discrimination against individuals with a disability), the Age
    Discrimination Act of 1975, and the Americans with Disabilities Act of
    1990.

                   Object Classification (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-0700-0-1-751      2000 actual   2001 est.   2002 est.
    ----------------------------------------------------------------------------

          Direct obligations:

            Personnel compensation:
    11.1      Full-time permanent...........          42          45          48
    11.3      Other than full-time permanent           1           2           2
                                               ---------   ---------  ----------
    11.9        Total personnel compensation          43          47          50
    12.1    Civilian personnel benefits.....           9          10          11
    21.0    Travel and transportation of
              persons.......................           1           1           1
    23.1    Rental payments to GSA..........           5           6           6
    23.3    Communications, utilities, and
              miscellaneous charges.........           2           2           2
    25.2    Other services..................           1           1           1
    25.3    Purchases of goods and services
              from Government accounts......           1           1           1
    25.7    Operation and maintenance of
              equipment.....................           4           5           5
    31.0    Equipment.......................           2           1           1
                                               ---------   ---------  ----------
    99.0      Subtotal, direct obligations..          68          74          78
    99.5  Below reporting threshold.........           3           2           2
                                               ---------   ---------  ----------
    99.9    Total new obligations...........          71          76          80
    ---------------------------------------------------------------------------

                                  Personnel Summary

    ----------------------------------------------------------------------------
    Identification code 91-0700-0-1-751      2000 actual   2001 est.   2002 est.
    ----------------------------------------------------------------------------
    1001  Total compensable workyears: Full-
            time equivalent employment......         712         724         724
    ---------------------------------------------------------------------------

                         Office of the Inspector General

        For expenses necessary for the Office of the Inspector General, as
    authorized by section 212 of the Department of Education Organization
    Act, [$36,500,000] $38,720,000. (Department of Education Appropriations
    Act, 2001, as enacted by section 1(a)(1) of P.L. 106-554.)

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-1400-0-1-751      2000 actual   2001 est.   2002 est.
    ----------------------------------------------------------------------------

        Obligations by program activity:
    00.01 Inspector General.................          34          36          39
                                               ---------   ---------  ----------
    10.00   Total new obligations...........          34          36          39
    ----------------------------------------------------------------------------

        Budgetary resources available for obligation:
    22.00 New budget authority (gross)......          34          36          39
    23.95 Total new obligations.............         -34         -36         -39
    ----------------------------------------------------------------------------

        New budget authority (gross), detail:
          Discretionary:

    40.00   Appropriation...................          34          36          39
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
          Unpaid obligations, start of year:

    72.40   Unpaid obligations, start of
              year..........................           9          10           9
                                               ---------   ---------  ----------
    72.99     Obligated balance, start of
                year........................           9          10           9
    73.10 Total new obligations.............          34          36          39
    73.20 Total outlays (gross).............         -33         -38         -38
          Unpaid obligations, end of year:

    74.40   Unpaid obligations, end of year.          10           9          10
                                               ---------   ---------  ----------
    74.99     Obligated balance, end of year          10           9          10
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.90 Outlays from new discretionary
            authority.......................          27          29          32
    86.93 Outlays from discretionary
            balances........................           6           8           7
                                               ---------   ---------  ----------
    87.00   Total outlays (gross)...........          33          38          38
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................          34          36          39
    90.00 Outlays...........................          33          38          38
    ---------------------------------------------------------------------------

        The Inspector General is responsible for the quality, coverage, and
    coordination of audit, investigation, and security functions relating to
    Federal education activities. The Inspector General has the authority to
    inquire into all activities of the Department including those performed
    under Federal education contracts, grants, or other agreements. Under
    the Chief Financial Officers Act of 1990, the Inspector General is also
    responsible for internal reviews of the Department's financial systems
    and audits of its financial statements.

                   Object Classification (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-1400-0-1-751      2000 actual   2001 est.   2002 est.
    ----------------------------------------------------------------------------

          Personnel compensation:

    11.1    Full-time permanent.............          16          19          20
    11.3    Other than full-time permanent..           1           1           1
    11.5    Other personnel compensation....           1
                                               ---------   ---------  ----------
    11.9      Total personnel compensation..          18          20          21
    12.1  Civilian personnel benefits.......           4           5           6
    21.0  Travel and transportation of
            persons.........................           2           2           2
    23.1  Rental payments to GSA............           3           3           3
    25.1  Advisory and assistance services..           2           2           3
    25.2  Other services....................           1           1
    25.3  Purchases of goods and services
            from Government accounts........           1           1           1
    25.7  Operation and maintenance of
            equipment.......................           1           2           2
    31.0  Equipment.........................           1                       1
    32.0  Land and structures...............           1
                                               ---------   ---------  ----------
    99.9    Total new obligations...........          34          36          39
    ---------------------------------------------------------------------------

                                  Personnel Summary

    ----------------------------------------------------------------------------
    Identification code 91-1400-0-1-751      2000 actual   2001 est.   2002 est.
    ----------------------------------------------------------------------------
    1001  Total compensable workyears: Full-
            time equivalent employment......         262         285         285
    ---------------------------------------------------------------------------

                             Headquarters Renovation

                   Program and Financing (in millions of dollars)

    ----------------------------------------------------------------------------
    Identification code 91-1500-0-1-503      2000 actual   2001 est.   2002 est.
    ----------------------------------------------------------------------------

        Change in unpaid obligations:
          Unpaid obligations, start of year:

    72.40   Unpaid obligations, start of
              year..........................           3           3
                                               ---------   ---------  ----------
    72.99     Obligated balance, start of
                year........................           3           3
    73.20 Total outlays (gross).............                      -3
          Unpaid obligations, end of year:

    74.40   Unpaid obligations, end of year.           3
                                               ---------   ---------  ----------
    74.99     Obligated balance, end of year           3
    ----------------------------------------------------------------------------

        Outlays (gross), detail:
    86.93 Outlays from discretionary
            balances........................                       3
    ----------------------------------------------------------------------------

        Net budget authority and outlays:
    89.00 Budget authority..................
    90.00 Outlays...........................                       3
    ---------------------------------------------------------------------------

        This account provided the Department of Education's portion of funds
    to renovate its headquarters building, including costs for
    administrative services, information technology, telecommunications
    cabling, and systems furniture. The remaining funds required for the
    renovation, which was completed in 1998, were provided by the General
    Services Administration.

    [[Page 384]]

                          GENERAL FUND RECEIPT ACCOUNTS

                               (in millions of dollars)

    ----------------------------------------------------------------------------
                                             2000 actual   2001 est.   2002 est.
    ----------------------------------------------------------------------------
    Offsetting receipts from the public:
      91-274130  College housing and
        academic facilities loan, downward
        reestimates of subsidies............                       2
      91-291500  Repayment of loans, capital
        contributions, higher education
        activities..........................          69          50          50
      91-310300  FFEL Guarantee agency
        reserve recoveries..................                                  59
      91-310900  HEAF reserve recoveries....                       7
                                               ---------   ---------  ----------
    General Fund Offsetting receipts from
     the public.............................          69          59         109
    ---------------------------------------------------------------------------

                               GENERAL PROVISIONS

        Sec. 301. No funds appropriated in this Act may be used for the
    transportation of students or teachers (or for the purchase of equipment
    for such transportation) in order to overcome racial imbalance in any
    school or school system, or for the transportation of students or
    teachers (or for the purchase of equipment for such transportation) in
    order to carry out a plan of racial desegregation of any school or
    school system.
        Sec. 302. None of the funds contained in this Act shall be used to
    require, directly or indirectly, the transportation of any student to a
    school other than the school which is nearest the student's home, except
    for a student requiring special education, to the school offering such
    special education, in order to comply with title VI of the Civil Rights
    Act of 1964. For the purpose of this section an indirect requirement of
    transportation of students includes the transportation of students to
    carry out a plan involving the reorganization of the grade structure of
    schools, the pairing of schools, or the clustering of schools, or any
    combination of grade restructuring, pairing or clustering. The
    prohibition described in this section does not include the establishment
    of magnet schools.
        Sec. 303. No funds appropriated under this Act may be used to
    prevent the implementation of programs of voluntary prayer and
    meditation in the public schools.

                               (transfer of funds)

        Sec. 304. Not to exceed 1 percent of any discretionary funds
    (pursuant to the Balanced Budget and Emergency Deficit Control Act of
    1985, as amended) which are appropriated for the Department of Education
    in this Act may be transferred between appropriations, but no such
    appropriation shall be increased by more than 3 percent by any such
    transfer: Provided, That the Appropriations Committees of both Houses of
    Congress are notified at least 15 days in advance of any transfer.
        [Sec. 305. The Comptroller General of the United States shall
    evaluate the extent to which funds made available under part A of title
    I of the Elementary and Secondary Education Act of 1965 are allocated to
    schools and local educational agencies with the greatest concentrations
    of school-age children from low-income families, the extent to which
    allocations of such funds adjust to shifts in concentrations of pupils
    from low-income families in different regions, States, and substate
    areas, the extent to which the allocation of such funds encourages the
    targeting of State funds to areas with higher concentrations of children
    from low-income families, and the implications of current distribution
    methods for such funds, shall make formula and other policy
    recommendations to improve the targeting of such funds to more
    effectively serve low-income children in both rural and urban areas, and
    shall prepare interim and final reports based on the results of the
    study, to be submitted to Congress not later than February 1, 2001, and
    April 1, 2001.]
        [Sec. 306. (a) From the amount appropriated for title VI of the
    Elementary and Secondary Education Act of 1965 in accordance with this
    section, the Secretary of Education--
            (1) shall make available a total of $6,000,000 to the Secretary
        of the Interior (on behalf of the Bureau of Indian Affairs) and the
        outlying areas for activities under this section; and
            (2) shall allocate the remainder by providing each State the
        same percentage of that remainder as it received of the funds
        allocated to States under section 307(a)(2) of the Department of
        Education Appropriations Act, 1999.
        (b)(1) Each State that receives funds under this section shall
    distribute 100 percent of such funds to local educational agencies, of
    which--
            (A) 80 percent of such amount shall be allocated to such local
        educational agencies in proportion to the number of children, aged 5
        to 17, who reside in the school district served by such local
        educational agency from families with incomes below the poverty line
        (as defined by the Office of Management and Budget and revised
        annually in accordance with section 673(2) of the Community Services
        Block Grant Act (42 U.S.C. 9902(2))) applicable to a family of the
        size involved for the most recent fiscal year for which satisfactory
        data are available compared to the number of such individuals who
        reside in the school districts served by all the local educational
        agencies in the State for that fiscal year; and
            (B) 20 percent of such amount shall be allocated to such local
        educational agencies in accordance with the relative enrollments of
        children, aged 5 to 17, in public and private nonprofit elementary
        and secondary schools within the boundaries of such agencies.
        (2) Notwithstanding paragraph (1), if the award to a local
    educational agency under this section is less than the starting salary
    for a new fully qualified teacher in that agency, who is certified
    within the State (which may include certification through State or local
    alternative routes), has a baccalaureate degree, and demonstrates the
    general knowledge, teaching skills, and subject matter knowledge
    required to teach in his or her content areas, that agency may use funds
    under this section to (A) help pay the salary of a full- or part-time
    teacher hired to reduce class size, which may be in combination with
    other Federal, State, or local funds; or (B) pay for activities
    described in subsection (c)(2)(A)(iii) which may be related to teaching
    in smaller classes.
        (c)(1) The basic purpose and intent of this section is to reduce
    class size with fully qualified teachers. Each local educational agency
    that receives funds under this section shall use such funds to carry out
    effective approaches to reducing class size with fully qualified
    teachers who are certified within the State, including teachers
    certified through State or local alternative routes, and who demonstrate
    competency in the areas in which they teach, to improve educational
    achievement for both regular and special needs children, with particular
    consideration given to reducing class size in the early elementary
    grades for which some research has shown class size reduction is most
    effective.
        (2)(A) Each such local educational agency may use funds under this
    section for--
            (i) recruiting (including through the use of signing bonuses,
        and other financial incentives), hiring, and training fully
        qualified regular and special education teachers (which may include
        hiring special education teachers to team-teach with regular
        teachers in classrooms that contain both children with disabilities
        and non-disabled children) and teachers of special-needs children
        who are certified within the State, including teachers certified
        through State or local alternative routes, have a baccalaureate
        degree and demonstrate the general knowledge, teaching skills, and
        subject matter knowledge required to teach in their content areas;
            (ii) testing new teachers for academic content knowledge and to
        meet State certification requirements that are consistent with title
        II of the Higher Education Act of 1965; and
            (iii) providing professional development (which may include such
        activities as those described in section 2210 of the Elementary and
        Secondary Education Act of 1965, opportunities for teachers to
        attend multi-week institutes, such as those made available during
        the summer months that provide intensive professional development in
        partnership with local educational agencies and initiatives that
        promote retention and mentoring), to teachers, including special
        education teachers and teachers of special-needs children, in order
        to meet the goal of ensuring that all instructional staff have the
        subject matter knowledge, teaching knowledge, and teaching skills
        necessary to teach effectively in the content area or areas in which
        they provide instruction, consistent with title II of the Higher
        Education Act of 1965.
        (B)(i) Except as provided under clause (ii), a local educational
    agency may use not more than a total of 25 percent of the award received
    under this section for activities described in clauses (ii) and (iii) of
    subparagraph (A).
        (ii) A local educational agency in which 10 percent or more of
    teachers in elementary schools, as defined by section 14101(14) of the
    Elementary and Secondary Education Act of 1965, have not met applicable
    State and local certification requirements (including certifi

    [[Page 385]]

    cation through State or local alternative routes), or if such
    requirements have been waived, may use more than 25 percent of the funds
    it receives under this section for activities described in subparagraph
    (A)(iii) to help teachers who are not certified by the State become
    certified, including through State or local alternative routes, or to
    help teachers affected by class size reduction who lack sufficient
    content knowledge to teach effectively in the areas they teach to obtain
    that knowledge, if the local educational agency notifies the State
    educational agency of the percentage of the funds that it will use for
    the purpose described in this clause.
        (C) A local educational agency that has already reduced class size
    in the early grades to 18 or less children (or has already reduced class
    size to a State or local class size reduction goal that was in effect on
    the day before the enactment of the Department of Education
    Appropriations Act, 2000, if that State or local educational agency goal
    is 20 or fewer children) may use funds received under this section--
            (i) to make further class size reductions in grades kindergarten
        through 3;
            (ii) to reduce class size in other grades; or
            (iii) to carry out activities to improve teacher quality
        including professional development.
        (D) If a local educational agency has already reduced class size in
    the early grades to 18 or fewer children and intends to use funds
    provided under this section to carry out professional development
    activities, including activities to improve teacher quality, then the
    State shall make the award under subsection (b) to the local educational
    agency.
        (3) Each such agency shall use funds under this section only to
    supplement, and not to supplant, State and local funds that, in the
    absence of such funds, would otherwise be spent for activities under
    this section.
        (4) No funds made available under this section may be used to
    increase the salaries or provide benefits, other than participation in
    professional development and enrichment programs, to teachers who are
    not hired under this section. Funds under this section may be used to
    pay the salary of teachers hired under section 307 of the Department of
    Education Appropriations Act, 1999, or under section 310 of the
    Department of Education Appropriations Act, 2000.
        (d)(1) Each State receiving funds under this section shall report on
    activities in the State under this section, consistent with section
    6202(a)(2) of the Elementary and Secondary Education Act of 1965.
        (2) Each State and local educational agency receiving funds under
    this section shall publicly report to parents on its progress in
    reducing class size, increasing the percentage of classes in core
    academic areas taught by fully qualified teachers who are certified
    within the State and demonstrate competency in the content areas in
    which they teach, and on the impact that hiring additional highly
    qualified teachers and reducing class size, has had, if any, on
    increasing student academic achievement.
        (3) Each school receiving funds under this section shall provide to
    parents, upon request, the professional qualifications of their child's
    teacher.
        (e) If a local educational agency uses funds made available under
    this section for professional development activities, the agency shall
    ensure for the equitable participation of private nonprofit elementary
    and secondary schools in such activities. Section 6402 of the Elementary
    and Secondary Education Act of 1965 shall not apply to other activities
    under this section.
        (f) A local educational agency that receives funds under this
    section may use not more than 3 percent of such funds for local
    administrative costs.
        (g) Each local educational agency that desires to receive funds
    under this section shall include in the application required under
    section 6303 of the Elementary and Secondary Education Act of 1965 a
    description of the agency's program to reduce class size by hiring
    additional highly qualified teachers.
        (h) No funds under this section may be used to pay the salary of any
    teacher hired with funds under section 307 of the Department of
    Education Appropriations Act, 1999, unless, by the start of the 2001-
    2002 school year, the teacher is certified within the State (which may
    include certification through State or local alternative routes) and
    demonstrates competency in the subject areas in which he or she teaches.
        (i) Not later than 30 days after the date of the enactment of this
    Act, the Secretary shall provide specific notification to each local
    educational agency eligible to receive funds under this part regarding
    the flexibility provided under subsection (c)(2)(B)(ii) and the ability
    to use such funds to carry out activities described in subsection
    (c)(2)(A)(iii).]
        [Sec. 307. Section 412 of the National Education Statistics Act of
    1994 (Public Law 103-382) is amended--
            (1) in subsection 412(c)(1), after ``period of'' and before
        ``years,'', by striking ``3'' and inserting ``4''; and
            (2) after ``expiration of such term.'', by adding the following
        new subsection:
            ``(4) Conforming provision.--Members of the Board previously
        granted 3 year terms, whose terms are in effect on the date of
        enactment of the Department of Education Appropriations Act, 2001,
        shall have their terms extended by one year.''.]
        [Sec. 308. (a) Section 435(a)(2) of the Higher Education Act of 1965
    (20 U.S.C. 1085(a)(2)) is amended by adding at the end thereof the
    following new subparagraph:
        ``(D) Notwithstanding the first sentence of subparagraph (A), the
    Secretary shall restore the eligibility to participate in a program
    under subpart 1 of part A, part B, or part D of an institution that did
    not appeal its loss of eligibility within 30 days of receiving
    notification if the Secretary determines, on a case-by-case basis, that
    the institution's failure to appeal was substantially justified under
    the circumstances, and that--
            ``(i) the institution made a timely request that the appropriate
        guaranty agency correct errors in the draft data used to calculate
        the institution's cohort default rate;
            ``(ii) the guaranty agency did not correct the erroneous data in
        a timely fashion; and
            ``(iii) the institution would have been eligible if the
        erroneous data had been corrected by the guaranty agency.''.
        (b) The amendment made by subsection (a) of this section shall be
    effective for cohort default rate calculations for fiscal years 1997 and
    1998.]
        [Sec. 309. Section 439(r)(2) of the Higher Education Act of 1965 (20
    U.S.C. 1087-2(r)(2)) is amended--
            (1) in clause (A)(i), by striking ``auditors and examiners'' and
        inserting ``and fix the compensation of such auditors and examiners
        as may be necessary''; and
            (2) by inserting at the end of subparagraph (E) the following
        new subparagraph:
                ``(F) Compensation of auditors and examiners.--
                    ``(i) Rates of pay.--Rates of basic pay for all auditors
                and examiners appointed pursuant to subparagraph (A) may be
                set and adjusted by the Secretary of the Treasury without
                regard to the provisions of chapter 51 or subchapter III of
                chapter 53 of title 5, United States Code.
                    ``(ii) Comparability.--
                ``(I) In general.--Subject to section 5373 of title 5,
            United States Code, the Secretary of the Treasury may provide
            additional compensation and benefits to auditors and examiners
            appointed pursuant to subparagraph (A) if the same type of
            compensation or benefits are then being provided by any agency
            referred to in section 1206 of the Financial Institutions
            Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C. 1833b)
            or, if not then being provided, could be provided by such an
            agency under applicable provisions of law, rule, or regulation.
                ``(II) Consultation.--In setting and adjusting the total
            amount of compensation and benefits for auditors and examiners
            appointed pursuant to subparagraph (A), the Secretary of the
            Treasury shall consult with, and seek to maintain comparability
            with, the agencies referred to in section 1206 of the Financial
            Institutions Reform, Recovery, and Enforcement Act of 1989 (12
            U.S.C. 1833b).''.]
        [Sec. 310. Section 117(i) of the Carl D. Perkins Vocational and
    Technical Education Act of 1998 (20 U.S.C. 2327(i)) is amended by
    inserting ``such sums as may be necessary for'' before ``each of the 4
    succeeding fiscal years.''.]
        [Sec. 311. Section 432(m)(1) of the Higher Education Act of 1965 (20
    U.S.C. 1082(m)(1)) is amended--
            (1) by striking clause (iv) of subparagraph (D); and
            (2) by adding at the end the following new subparagraph:
                    ``(E) Perfection of security interests in student
                loans.--
                    ``(i) In general.--Notwithstanding the provisions of any
                State law to the contrary, including the Uniform Commercial
                Code as in effect in any State, a security interest in loans
                made under this part, on behalf of any eligible lender (as
                defined in section 435(d)) shall attach, be perfected, and
                be

    [[Page 386]]

                assigned priority in the manner provided by the applicable
                State's law for perfection of security interests in
                accounts, as such law may be amended from time to time
                (including applicable transition provisions). If any such
                State's law provides for a statutory lien to be created in
                such loans, such statutory lien may be created by the entity
                or entities governed by such State law in accordance with
                the applicable statutory provisions that created such a
                statutory lien.
                    ``(ii) Collateral description.--In addition to any other
                method for describing collateral in a legally sufficient
                manner permitted under the laws of the State, the
                description of collateral in any financing statement filed
                pursuant to this subparagraph shall be deemed legally
                sufficient if it lists such loans, or refers to records
                (identifying such loans) retained by the secured party or
                any designee of the secured party identified in such
                financing statement, including the debtor or any loan
                servicer.
                    ``(iii) Sales.--Notwithstanding clauses (i) and (ii) and
                any provisions of any State law to the contrary, other than
                any such State's law providing for creation of a statutory
                lien, an outright sale of loans made under this part shall
                be effective and perfected automatically upon attachment as
                defined in the Uniform Commercial Code of such State.''.]
        [Sec. 312. Section 435(a)(5) of the Higher Education Act of 1965 (20
    U.S.C. 1085(a)(5)) is amended--
            (1) in subparagraph (A)(i), by striking ``July 1, 2002,'' and
        inserting ``July 1, 2004,'';
            (2) in subparagraph (B), by striking ``1999, 2000, and 2001''
        and inserting ``1999 through 2003''.]
        [Sec. 313. From the amounts made available for the ``Fund for the
    Improvement of Education'' under the heading ``Education Research,
    Statistics, and Improvement'', $10,000,000, to remain available until
    expended, shall be available to the Secretary of Education to be
    transferred to the Secretary of the Interior for an award to the
    National Constitution Center for construction activities authorized
    under Public Law 100-433.]
        [Sec. 314. Section 4116(b)(4) of the Elementary and Secondary
    Education Act of 1965 is amended by striking subparagraph (D) and
    inserting in lieu thereof: ``(D) the development and implementation of
    character education and training programs that reflect the values of
    parents, teachers, and local communities, and incorporate elements of
    good character, including honesty, citizenship, courage, justice,
    respect, personal responsibility, and trustworthiness; and''.]
        [Sec. 315. The Secretary of Education shall review the nursing
    program operated by Graceland University in Lamoni, Iowa, and may
    exercise the waiver authority provided in section 102(a)(3)(B) of the
    Higher Education Act of 1965, without regard to the provisions of 34 CFR
    600.7(b)(3)(ii), if the Secretary determines that such a waiver is
    appropriate.]
        [Sec. 316. Section 415 of the Higher Education Act of 1965 is
    amended--
            (1) in section 415A(a)(2), by striking ``section 415F'' and
        inserting ``section 415E'';
            (2) in section 415E, by striking 415E(c) and inserting in lieu
        thereof the following:
        ``(c) Authorized Activities.--Each State receiving a grant under
    this section may use the grant funds for--
            ``(1) making awards that--
                ``(A) supplement grants received under section 415C(b)(2) by
            eligible students who demonstrate financial need; or
                ``(B) provide grants under section 415C(b)(2) to additional
            eligible students who demonstrate financial need;
            ``(2) providing scholarships for eligible students--
                ``(A) who demonstrate financial need; and
                ``(B) who--
                    ``(i) desire to enter a program of study leading to a
                career in--
                ``(I) information technology;
                ``(II) mathematics, computer science, or engineering;
                ``(III) teaching; or
                ``(IV) another field determined by the State to be critical
            to the State's workforce needs; or
                    ``(ii) demonstrate merit or academic achievement; and
            ``(3) making awards that--
                ``(A) supplement community service work-study awards
            received under section 415C(b)(2) by eligible students who
            demonstrate financial need; or
                ``(B) provide community service work-study awards under
            section 415C(b)(2) to additional eligible students who
            demonstrate financial need.''.
            (3) in section 415E, adding at the end the following new
        subsections:
        ``(f) Special Rule.--Notwithstanding subsection (d), for purposes of
    determining a State's share of the cost of the authorized activities
    described in subsection (c), the State shall consider only those
    expenditures from non-Federal sources that exceed its total expenditures
    for need-based grants, scholarships, and work-study assistance for
    fiscal year 1999 (including any such assistance provided under this
    subpart).
        ``(g) Use of Funds for Administrative Costs Prohibited.--A State
    receiving a grant under this section shall not use any of the grant
    funds to pay administrative costs associated with any of the authorized
    activities described in subsection (c).''.]
        [Sec. 317. (a) Section 402D of the Higher Education Act of 1965 (20
    U.S.C. 1070a-14) is amended--
            (1) by redesignating subsection (c) as subsection (d); and
            (2) by inserting after subsection (b) the following new
        subsection:
        ``(c) Special Rule.--
            ``(1) Use for student aid.--A recipient of a grant that
        undertakes any of the permissible services identified in subsection
        (b) may, in addition, use such funds to provide grant aid to
        students. A grant provided under this paragraph shall not exceed the
        maximum appropriated Pell Grant or, be less than the minimum
        appropriated Pell Grant, for the current academic year. In making
        grants to students under this subsection, an institution shall
        ensure that adequate consultation takes place between the student
        support service program office and the institution's financial aid
        office.
            ``(2) Eligible students.--For purposes of receiving grant aid
        under this subsection, eligible students shall be current
        participants in the student support services program offered by the
        institution and be--
                    ``(A) students who are in their first 2 years of
                postsecondary education and who are receiving Federal Pell
                Grants under subpart 1; or
                    ``(B) students who have completed their first 2 years of
                postsecondary education and who are receiving Federal Pell
                Grants under subpart 1 if the institution demonstrates to
                the satisfaction of the Secretary that--
                    ``(i) these students are at high risk of dropping out;
                and
                    ``(ii) it will first meet the needs of all its eligible
                first- and second-year students for services under this
                paragraph.
            ``(3) Determination of need.--A grant provided to a student
        under paragraph (1) shall not be considered in determining that
        student's need for grant or work assistance under this title, except
        that in no case shall the total amount of student financial
        assistance awarded to a student under this title exceed that
        student's cost of attendance, as defined in section 472.
            ``(4) Matching required.--A recipient of a grant who uses such
        funds for the purpose described in paragraph (1) shall match the
        funds used for such purpose, in cash, from non-Federal funds, in an
        amount that is not less than 33 percent of the total amount of funds
        used for that purpose. This paragraph shall not apply to any grant
        recipient that is an institution of higher education eligible to
        receive funds under part A or B of title III or title V.
            ``(5) Reservation.--In no event may a recipient use more than 20
        percent of the funds received under this section for grant aid.
            ``(6) Supplement, not supplant.--Funds received by a grant
        recipient that are used under this subsection shall be used to
        supplement, and not supplant, non-Federal funds expended for student
        support services programs.''.
        (b) The amendments made by subsection (a) shall apply with respect
    to student support services grants awarded on or after the date of
    enactment of this Act.]
        [Sec. 318. (a) Subparagraph (B) of section 427A(c)(4) of the Higher
    Education Act of 1965 (20 U.S.C. 1077a(c)(4)) is amended to read as
    follows:
                    ``(B)(i) For any 12-month period beginning on July 1 and
                ending on or before June 30, 2001, the rate determined under
                this subparagraph is determined on the preceding June 1 and
                is equal to--
                ``(I) the bond equivalent rate of 52-week Treasury bills
            auctioned at the final auction held prior to such June 1; plus
                ``(II) 3.25 percent.

    [[Page 387]]

                    ``(ii) For any 12-month period beginning on July 1 of
                2001 or any succeeding year, the rate determined under this
                subparagraph is determined on the preceding June 26 and is
                equal to--
                ``(I) the weekly average 1-year constant maturity Treasury
            yield, as published by the Board of Governors of the Federal
            Reserve System, for the last calendar week ending on or before
            such June 26; plus
                ``(II) 3.25 percent.''.
        (b) Subparagraph (A) of section 455(b)(4) of such Act (20 U.S.C.
    1087e(b)(4)) is amended to read as follows:
                    ``(A)(i) For Federal Direct PLUS Loans for which the
                first disbursement is made on or after July 1, 1994, the
                applicable rate of interest shall, during any 12-month
                period beginning on July 1 and ending on or before June 30,
                2001, be determined on the preceding June 1 and be equal
                to--
                ``(I) the bond equivalent rate of 52-week Treasury bills
            auctioned at final auction held prior to such June 1; plus
                ``(II) 3.1 percent,
                    except that such rate shall not exceed 9 percent.
                    ``(ii) For any 12-month period beginning on July 1 of
                2001 or any succeeding year, the applicable rate of interest
                determined under this subparagraph shall be determined on
                the preceding June 26 and be equal to--
                ``(I) the weekly average 1-year constant maturity Treasury
            yield, as published by the Board of Governors of the Federal
            Reserve System, for the last calendar week ending on or before
            such June 26; plus
                ``(II) 3.1 percent,
                    except that such rate shall not exceed 9 percent.''.]
        [Sec. 319. Section 1543 of the Higher Education Amendments of 1992
    (20 U.S.C. 1070 note) is amended by adding at the end the following new
    subsection:
        ``(e) Designation.--Scholarships awarded under this section shall be
    known as `B. J. Stupak Olympic Scholarships'.''.]
        [Sec. 320. (a) Subject to subsection (c), the Secretary of Education
    shall release the reversionary interests that were retained by the
    United States, as part of the conveyance of certain real property
    situated in the County of Marin, State of California, in an April 3,
    1978 Quitclaim Deed, which was filed for record on June 5, 1978, in Book
    3384, at page 33, of the official Records of Marin County, California.
        (b) The Secretary shall execute the release of the reversionary
    interests under subsection (a) without consideration.
        (c) The Secretary shall execute and file in the appropriate office
    or offices a deed of release, amended deed, or other appropriate
    instruments effectuating the release of the reversionary interests under
    subsection (a). In all other respects the provisions of the April 3,
    1978 Quitclaim Deed shall remain intact.]
        [Sec. 321. (a) Grants to Native American Schools and State
    Educational Agencies.--
            (1) Allocation of funds.--Of the amount made available under the
        heading ``School improvement programs'' for grants made in
        accordance with this section for school repair and renovation,
        activities under part B of the Individuals with Disabilities
        Education Act (20 U.S.C. 1411 et seq.), and technology activities,
        the Secretary of Education shall allocate--
                (A) $75,000,000 for grants to impacted local educational
            agencies (as defined in paragraph (3)) for school repair,
            renovation, and construction;
                (B) $3,250,000 for grants to outlying areas for school
            repair and renovation in high-need schools and communities,
            allocated on such basis, and subject to such terms and
            conditions, as the Secretary determines appropriate;
                (C) $25,000,000 for grants to public entities, private
            nonprofit entities, and consortia of such entities, for use in
            accordance with subpart 2 of part C of title X of the Elementary
            and Secondary Education Act of 1965; and
                (D) the remainder to State educational agencies in
            proportion to the amount each State received under part A of
            title I of the Elementary and Secondary Education Act of 1965
            (20 U.S.C. 6311 et seq.) for fiscal year 2000, except that no
            State shall receive less than 0.5 percent of the amount
            allocated under this subparagraph.
            (2) Determination of grant amount.--
                (A) Determination of weighted student units.--For purposes
            of computing the grant amounts under paragraph (1)(A) for fiscal
            year 2001, the Secretary shall determine the results obtained by
            the computation made under section 8003 of the Elementary and
            Secondary Education Act of 1965 (20 U.S.C. 7703) with respect to
            children described in subsection (a)(1)(C) of such section and
            computed under subsection (a)(2)(B) of such section for such
            year--
                    (i) for each impacted local educational agency that
                receives funds under this section; and
                    (ii) for all such agencies together.
                (B) Computation of payment.--For fiscal year 2001, the
            Secretary shall calculate the amount of a grant to an impacted
            local educational agency by--
                    (i) dividing the amount described in paragraph (1)(A) by
                the results of the computation described in subparagraph
                (A)(ii); and
                    (ii) multiplying the number derived under clause (i) by
                the results of the computation described in subparagraph
                (A)(i) for such agency.
            (3) Definition.--For purposes of this section, the term
        ``impacted local educational agency'' means, for fiscal year 2001--
                (A) a local educational agency that receives a basic support
            payment under section 8003(b) of the Elementary and Secondary
            Education Act of 1965 (20 U.S.C. 7703(b)) for such fiscal year;
            and
                (B) with respect to which the number of children determined
            under section 8003(a)(1)(C) of such Act for the preceding school
            year constitutes at least 50 percent of the total student
            enrollment in the schools of the agency during such school year.
        (b) Within-State Allocations.--
            (1) Administrative costs.--
                (A) State educational agency administration.--Except as
            provided in subparagraph (B), each State educational agency may
            reserve not more than 1 percent of its allocation under
            subsection (a)(1)(D) for the purpose of administering the
            distribution of grants under this subsection.
                (B) State entity administration.--If the State educational
            agency transfers funds to a State entity described in paragraph
            (2)(A), the agency shall transfer to such entity 0.75 of the
            amount reserved under this paragraph for the purpose of
            administering the distribution of grants under this subsection.
            (2) Reservation for competitive school repair and renovation
        grants to local educational agencies.--
                (A) In general.--Subject to the reservation under paragraph
            (1), of the funds allocated to a State educational agency under
            subsection (a)(1)(D), the State educational agency shall
            distribute 75 percent of such funds to local educational
            agencies or, if such State educational agency is not responsible
            for the financing of education facilities, the agency shall
            transfer such funds to the State entity responsible for the
            financing of education facilities (referred to in this section
            as the ``State entity'') for distribution by such entity to
            local educational agencies in accordance with this paragraph, to
            be used, consistent with subsection (c), for school repair and
            renovation.
                (B) Competitive grants to local educational agencies.--
                    (i) In general.--The State educational agency or State
                entity shall carry out a program of competitive grants to
                local educational agencies for the purpose described in
                subparagraph (A). Of the total amount available for
                distribution to such agencies under this paragraph, the
                State educational agency or State entity, shall, in carrying
                out the competition--
                (I) award to high poverty local educational agencies
            described in clause (ii), in the aggregate, at least an amount
            which bears the same relationship to such total amount as the
            aggregate amount such local educational agencies received under
            part A of title I of the Elementary and Secondary Education Act
            of 1965 for fiscal year 2000 bears to the aggregate amount
            received for such fiscal year under such part by all local
            educational agencies in the State;
                (II) award to rural local educational agencies in the State,
            in the aggregate, at least an amount which bears the same
            relationship to such total amount as the aggregate amount such
            rural local educational agencies received under part A of title
            I of the Elementary and Secondary Education Act of 1965 for
            fiscal year 2000 bears to the aggregate amount received for such
            fiscal year under such part by all local educational agencies in
            the State; and
                (III) award the remaining funds to local educational
            agencies not receiving an award under subclause (I) or (II), in

    [[Page 388]]

            cluding high poverty and rural local educational agencies that
            did not receive such an award.
                    (ii) High poverty local educational agencies.--A local
                educational agency is described in this clause if--
                (I) the percentage described in subparagraph (C)(i) with
            respect to the agency is 30 percent or greater; or
                (II) the number of children described in such subparagraph
            with respect to the agency is at least 10,000.
                (C) Criteria for awarding grants.--In awarding competitive
            grants under this paragraph, a State educational agency or State
            entity shall take into account the following criteria:
                    (i) The percentage of poor children 5 to 17 years of
                age, inclusive, in a local educational agency.
                    (ii) The need of a local educational agency for school
                repair and renovation, as demonstrated by the condition of
                its public school facilities.
                    (iii) The fiscal capacity of a local educational agency
                to meet its needs for repair and renovation of public school
                facilities without assistance under this section, including
                its ability to raise funds through the use of local bonding
                capacity and otherwise.
                    (iv) In the case of a local educational agency that
                proposes to fund a repair or renovation project for a
                charter school or schools, the extent to which the school or
                schools have access to funding for the project through the
                financing methods available to other public schools or local
                educational agencies in the State.
                    (v) The likelihood that the local educational agency
                will maintain, in good condition, any facility whose repair
                or renovation is assisted under this section.
                (D) Possible matching requirement.--
                    (i) In general.--A State educational agency or State
                entity may require local educational agencies to match funds
                awarded under this subsection.
                    (ii) Match amount.--The amount of a match described in
                clause (i) may be established by using a sliding scale that
                takes into account the relative poverty of the population
                served by the local educational agency.
            (3) Reservation for competitive idea or technology grants to
        local educational agencies.--
                (A) In general.--Subject to the reservation under paragraph
            (1), of the funds allocated to a State educational agency under
            subsection (a)(1)(D), the State educational agency shall
            distribute 25 percent of such funds to local educational
            agencies through competitive grant processes, to be used for the
            following:
                    (i) To carry out activities under part B of the
                Individuals with Disabilities Education Act (20 U.S.C. 1411
                et seq.).
                    (ii) For technology activities that are carried out in
                connection with school repair and renovation, including--
                (I) wiring;
                (II) acquiring hardware and software;
                (III) acquiring connectivity linkages and resources; and
                (IV) acquiring microwave, fiber optics, cable, and satellite
            transmission equipment.
                (B) Criteria for awarding idea grants.--In awarding
            competitive grants under subparagraph (A) to be used to carry
            out activities under part B of the Individuals with Disabilities
            Education Act (20 U.S.C. 1411 et seq.), a State educational
            agency shall take into account the following criteria:
                    (i) The need of a local educational agency for
                additional funds for a student whose individually allocable
                cost for expenses related to the Individuals with
                Disabilities Education Act substantially exceeds the State's
                average per-pupil expenditure (as defined in section
                14101(2) of the Elementary and Secondary Education Act of
                1965 (20 U.S.C. 8801(2))).
                    (ii) The need of a local educational agency for
                additional funds for special education and related services
                under part B of the Individuals with Disabilities Education
                Act (20 U.S.C. 1411 et seq.).
                    (iii) The need of a local educational agency for
                additional funds for assistive technology devices (as
                defined in section 602 of the Individuals with Disabilities
                Education Act (20 U.S.C. 1401)) or assistive technology
                services (as so defined) for children being served under
                part B of the Individuals with Disabilities Education Act
                (20 U.S.C. 1411 et seq.).
                    (iv) The need of a local educational agency for
                additional funds for activities under part B of the
                Individuals with Disabilities Education Act (20 U.S.C. 1411
                et seq.) in order for children with disabilities to make
                progress toward meeting the performance goals and indicators
                established by the State under section 612(a)(16) of such
                Act (20 U.S.C. 1412).
                (C) Criteria for awarding technology grants.--In awarding
            competitive grants under subparagraph (A) to be used for
            technology activities that are carried out in connection with
            school repair and renovation, a State educational agency shall
            take into account the need of a local educational agency for
            additional funds for such activities, including the need for the
            activities described in subclauses (I) through (IV) of
            subparagraph (A)(ii).
        (c) Rules Applicable to School Repair and Renovation.--With respect
    to funds made available under this section that are used for school
    repair and renovation, the following rules shall apply:
            (1) Permissible uses of funds.--School repair and renovation
        shall be limited to one or more of the following:
                (A) Emergency repairs or renovations to public school
            facilities only to ensure the health and safety of students and
            staff, including--
                    (i) repairing, replacing, or installing roofs,
                electrical wiring, plumbing systems, or sewage systems;
                    (ii) repairing, replacing, or installing heating,
                ventilation, or air conditioning systems (including
                insulation); and
                    (iii) bringing public schools into compliance with fire
                and safety codes.
                (B) School facilities modifications necessary to render
            public school facilities accessible in order to comply with the
            Americans with Disabilities Act of 1990 (42 U.S.C. 12101 et
            seq.).
                (C) School facilities modifications necessary to render
            public school facilities accessible in order to comply with
            section 504 of the Rehabilitation Act of 1973 (29 U.S.C. 794).
                (D) Asbestos abatement or removal from public school
            facilities.
                (E) Renovation, repair, and acquisition needs related to the
            building infrastructure of a charter school.
            (2) Impermissible uses of funds.--No funds received under this
        section may be used for--
                (A) payment of maintenance costs in connection with any
            projects constructed in whole or part with Federal funds
            provided under this section;
                (B) the construction of new facilities, except for
            facilities for an impacted local educational agency (as defined
            in subsection (a)(3)); or
                (C) stadiums or other facilities primarily used for athletic
            contests or exhibitions or other events for which admission is
            charged to the general public.
            (3) Charter schools.--A public charter school that constitutes a
        local educational agency under State law shall be eligible for
        assistance under the same terms and conditions as any other local
        educational agency (as defined in section 14101(18) of the
        Elementary and Secondary Education Act of 1965 (20 U.S.C.
        8801(18))).
            (4) Supplement, not supplant.--Excluding the uses described in
        subparagraphs (B) and (C) of paragraph (1), a local educational
        agency shall use Federal funds subject to this subsection only to
        supplement the amount of funds that would, in the absence of such
        Federal funds, be made available from non-Federal sources for school
        repair and renovation.
        (d) Special Rule.--Each local educational agency that receives funds
    under this section shall ensure that, if it carries out repair or
    renovation through a contract, any such contract process ensures the
    maximum number of qualified bidders, including small, minority, and
    women-owned businesses, through full and open competition.
        (e) Public Comment.--Each local educational agency receiving funds
    under paragraph (2) or (3) of subsection (b)--
            (1) shall provide parents, educators, and all other interested
        members of the community the opportunity to consult on the use of
        funds received under such paragraph;
            (2) shall provide the public with adequate and efficient notice
        of the opportunity described in paragraph (1) in a widely read and
        distributed medium; and
            (3) shall provide the opportunity described in paragraph (1) in
        accordance with any applicable State and local law specifying how
        the comments may be received and how the comments may be reviewed by
        any member of the public.
        (f) Reporting.--
            (1) Local reporting.--Each local educational agency receiving
        funds under subsection (a)(1)(D) shall submit a report to the State

    [[Page 389]]

        educational agency, at such time as the State educational agency may
        require, describing the use of such funds for--
                (A) school repair and renovation (and construction, in the
            case of an impacted local educational agency (as defined in
            subsection (a)(3)));
                (B) activities under part B of the Individuals with
            Disabilities Education Act (20 U.S.C. 1411 et seq.); and
                (C) technology activities that are carried out in connection
            with school repair and renovation, including the activities
            described in subclauses (I) through (IV) of subsection
            (b)(3)(A)(ii).
            (2) State reporting.--Each State educational agency shall submit
        to the Secretary of Education, not later than December 31, 2002, a
        report on the use of funds received under subsection (a)(1)(D) by
        local educational agencies for--
                (A) school repair and renovation (and construction, in the
            case of an impacted local educational agency (as defined in
            subsection (a)(3)));
                (B) activities under part B of the Individuals with
            Disabilities Education Act (20 U.S.C. 1411 et seq.); and
                (C) technology activities that are carried out in connection
            with school repair and renovation, including the activities
            described in subclauses (I) through (IV) of subsection
            (b)(3)(A)(ii).
            (3) Additional reports.--Each entity receiving funds allocated
        under subsection (a)(1)(A) or (B) shall submit to the Secretary, not
        later than December 31, 2002, a report on its uses of funds under
        this section, in such form and containing such information as the
        Secretary may require.
        (g) Applicability of Part B of IDEA.--If a local educational agency
    uses funds received under this section to carry out activities under
    part B of the Individuals with Disabilities Education Act (20 U.S.C.
    1411 et seq.), such part (including provisions respecting the
    participation of private school children), and any other provision of
    law that applies to such part, shall apply to such use.
        (h) Reallocation.--If a State educational agency does not apply for
    an allocation of funds under subsection (a)(1)(D) for fiscal year 2001,
    or does not use its entire allocation for such fiscal year, the
    Secretary may reallocate the amount of the State educational agency's
    allocation (or the remainder thereof, as the case may be) to the
    remaining State educational agencies in accordance with subsection
    (a)(1)(D).
        (i) Participation of Private Schools.--
            (1) In general.--Section 6402 of the Elementary and Secondary
        Education Act of 1965 (20 U.S.C. 7372) shall apply to subsection
        (b)(2) in the same manner as it applies to activities under title VI
        of such Act, except that--
                (A) such section shall not apply with respect to the title
            to any real property renovated or repaired with assistance
            provided under this section;
                (B) the term ``services'' as used in section 6402 of such
            Act with respect to funds under this section shall be provided
            only to private, nonprofit elementary or secondary schools with
            a rate of child poverty of at least 40 percent and may include
            for purposes of subsection (b)(2) only--
                (i) modifications of school facilities necessary to meet the
            standards applicable to public schools under the Americans with
            Disabilities Act of 1990 (42 U.S.C. 12101 et seq.);
                (ii) modifications of school facilities necessary to meet
            the standards applicable to public schools under section 504 of
            the Rehabilitation Act of 1973 (29 U.S.C. 794); and
                (iii) asbestos abatement or removal from school facilities;
            and
                (C) notwithstanding the requirements of section 6402(b) of
            the Elementary and Secondary Education Act of 1965 (20 U.S.C.
            7372(b)), expenditures for services provided using funds made
            available under subsection (b)(2) shall be considered equal for
            purposes of such section if the per-pupil expenditures for
            services described in subparagraph (B) for students enrolled in
            private nonprofit elementary and secondary schools that have
            child poverty rates of at least 40 percent are consistent with
            the per-pupil expenditures under this section for children
            enrolled in the public schools in the school district of the
            local educational agency receiving funds under this section.
            (2) Remaining funds.--If the expenditure for services described
        in paragraph (1)(B) is less than the amount calculated under
        paragraph (1)(C) because of insufficient need for such services, the
        remainder shall be available to the local educational agency for
        renovation and repair of public school facilities.
            (3) Application.--If any provision of this section, or the
        application thereof, to any person or circumstances is judicially
        determined to be invalid, the provisions of the remainder of the
        section and the application to other persons or circumstances shall
        not be affected thereby.
        (j) Definitions.--For purposes of this section:
            (1) Charter school.--The term ``charter school'' has the meaning
        given such term in section 10310(1) of the Elementary and Secondary
        Education Act of 1965 (20 U.S.C. 8066(1)).
            (2) Elementary school.--The term ``elementary school'' has the
        meaning given such term in section 14101(14) of the Elementary and
        Secondary Education Act of 1965 (20 U.S.C. 8801(14)).
            (3) Local educational agency.--The term ``local educational
        agency'' has the meaning given such term in subparagraphs (A) and
        (B) of section 14101(18) of the Elementary and Secondary Education
        Act of 1965 (20 U.S.C. 8801(18)).
            (4) Outlying area.--The term ``outlying area'' has the meaning
        given such term in section 14101(21) of the Elementary and Secondary
        Act of 1965 (20 U.S.C. 8801(21)).
            (5) Poor children and child poverty.--The terms ``poor
        children'' and ``child poverty'' refer to children 5 to 17 years of
        age, inclusive, who are from families with incomes below the poverty
        line (as defined by the Office of Management and Budget and revised
        annually in accordance with section 673(2) of the Community Services
        Block Grant (42 U.S.C. 9902(2)) applicable to a family of the size
        involved for the most recent fiscal year for which data satisfactory
        to the Secretary are available.
            (6) Rural local educational agency.--The term ``rural local
        educational agency'' means a local educational agency that the State
        determines is located in a rural area using objective data and a
        commonly employed definition of the term ``rural''.
            (7) Secondary school.--The term ``secondary school'' has the
        meaning given such term in section 14101(25) of the Elementary and
        Secondary Education Act of 1965 (20 U.S.C. 8801(25)).
            (8) State.--The term ``State'' means each of the 50 states, the
        District of Columbia, and the Commonwealth of Puerto Rico.]
        [Sec. 322. (a) Part C of title X of the Elementary and Secondary
    Education Act of 1965 (20 U.S.C. 8061 et seq.) is amended--
            (1) by inserting after the part heading the following:
                ``Subpart 1--Basic Charter School Grant Program'';
            and
            (2) by adding at the end the following:
                ``Subpart 2--Credit Enhancement Initiatives To Assist
            Charter School Facility Acquisition, Construction, and
            Renovation

    ``SEC. 10321. PURPOSE.

        ``The purpose of this subpart is to provide one-time grants to
    eligible entities to permit them to demonstrate innovative credit
    enhancement initiatives that assist charter schools to address the cost
    of acquiring, constructing, and renovating facilities.

    ``SEC. 10322. GRANTS TO ELIGIBLE ENTITIES.

        ``(a) In General.--The Secretary shall use 100 percent of the amount
    available to carry out this subpart to award not less than 3 grants to
    eligible entities having applications approved under this subpart to
    demonstrate innovative methods of assisting charter schools to address
    the cost of acquiring, constructing, and renovating facilities by
    enhancing the availability of loans or bond financing.
        ``(b) Grantee Selection.--The Secretary shall evaluate each
    application submitted, and shall make a determination of which are
    sufficient to merit approval and which are not. The Secretary shall
    award at least one grant to an eligible entity described in section
    10330(2)(A), at least one grant to an eligible entity described in
    section 10330(2)(B), and at least one grant to an eligible entity
    described in section 10330(2)(C), if applications are submitted that
    permit the Secretary to do so without approving an application that is
    not of sufficient quality to merit approval.
        ``(c) Grant Characteristics.--Grants under this subpart shall be of
    a sufficient size, scope, and quality so as to ensure an effective
    demonstration of an innovative means of enhancing credit for the
    financing of charter school acquisition, construction, or renovation.
        ``(d) Special Rule.--In the event the Secretary determines that the
    funds available are insufficient to permit the Secretary to award not
    less than 3 grants in accordance with subsections (a) through (c), such
    3-grant minimum and the second sentence of subsection (b) shall not
    apply, and the Secretary may determine the appropriate number of grants
    to be awarded in accordance with subsection (c).

    [[Page 390]]

    ``SEC. 10323. APPLICATIONS.

        ``(a) In General.--To receive a grant under this subpart, an
    eligible entity shall submit to the Secretary an application in such
    form as the Secretary may reasonably require.
        ``(b) Contents.--An application under subsection (a) shall contain--
            ``(1) a statement identifying the activities proposed to be
        undertaken with funds received under this subpart, including how the
        applicant will determine which charter schools will receive
        assistance, and how much and what types of assistance charter
        schools will receive;
            ``(2) a description of the involvement of charter schools in the
        application's development and the design of the proposed activities;
            ``(3) a description of the applicant's expertise in capital
        market financing;
            ``(4) a description of how the proposed activities will leverage
        the maximum amount of private-sector financing capital relative to
        the amount of government funding used and otherwise enhance credit
        available to charter schools;
            ``(5) a description of how the applicant possesses sufficient
        expertise in education to evaluate the likelihood of success of a
        charter school program for which facilities financing is sought;
            ``(6) in the case of an application submitted by a State
        governmental entity, a description of the actions that the entity
        has taken, or will take, to ensure that charter schools within the
        State receive the funding they need to have adequate facilities; and
            ``(7) such other information as the Secretary may reasonably
        require.

    ``SEC. 10324. CHARTER SCHOOL OBJECTIVES.

        ``An eligible entity receiving a grant under this subpart shall use
    the funds deposited in the reserve account established under section
    10325(a) to assist one or more charter schools to access private sector
    capital to accomplish one or both of the following objectives:
            ``(1) The acquisition (by purchase, lease, donation, or
        otherwise) of an interest (including an interest held by a third
        party for the benefit of a charter school) in improved or unimproved
        real property that is necessary to commence or continue the
        operation of a charter school.
            ``(2) The construction of new facilities, or the renovation,
        repair, or alteration of existing facilities, necessary to commence
        or continue the operation of a charter school.

    ``SEC. 10325. RESERVE ACCOUNT.

        ``(a) Use of Funds.--To assist charter schools to accomplish the
    objectives described in section 10324, an eligible entity receiving a
    grant under this subpart shall, in accordance with State and local law,
    directly or indirectly, alone or in collaboration with others, deposit
    the funds received under this subpart (other than funds used for
    administrative costs in accordance with section 10326) in a reserve
    account established and maintained by the entity for this purpose.
    Amounts deposited in such account shall be used by the entity for one or
    more of the following purposes:
            ``(1) Guaranteeing, insuring, and reinsuring bonds, notes,
        evidences of debt, loans, and interests therein, the proceeds of
        which are used for an objective described in section 10324.
            ``(2) Guaranteeing and insuring leases of personal and real
        property for an objective described in section 10324.
            ``(3) Facilitating financing by identifying potential lending
        sources, encouraging private lending, and other similar activities
        that directly promote lending to, or for the benefit of, charter
        schools.
            ``(4) Facilitating the issuance of bonds by charter schools, or
        by other public entities for the benefit of charter schools, by
        providing technical, administrative, and other appropriate
        assistance (including the recruitment of bond counsel, underwriters,
        and potential investors and the consolidation of multiple charter
        school projects within a single bond issue).
        ``(b) Investment.--Funds received under this subpart and deposited
    in the reserve account shall be invested in obligations issued or
    guaranteed by the United States or a State, or in other similarly low-
    risk securities.
        ``(c) Reinvestment of Earnings.--Any earnings on funds received
    under this subpart shall be deposited in the reserve account established
    under subsection (a) and used in accordance with such subsection.

    ``SEC. 10326. LIMITATION ON ADMINISTRATIVE COSTS.

        ``An eligible entity may use not more than 0.25 percent of the funds
    received under this subpart for the administrative costs of carrying out
    its responsibilities under this subpart.

    ``SEC. 10327. AUDITS AND REPORTS.

        ``(a) Financial Record Maintenance and Audit.--The financial records
    of each eligible entity receiving a grant under this subpart shall be
    maintained in accordance with generally accepted accounting principles
    and shall be subject to an annual audit by an independent public
    accountant.
        ``(b) Reports.--
            ``(1) Grantee annual reports.--Each eligible entity receiving a
        grant under this subpart annually shall submit to the Secretary a
        report of its operations and activities under this subpart.
            ``(2) Contents.--Each such annual report shall include--
                    ``(A) a copy of the most recent financial statements,
                and any accompanying opinion on such statements, prepared by
                the independent public accountant reviewing the financial
                records of the eligible entity;
                    ``(B) a copy of any report made on an audit of the
                financial records of the eligible entity that was conducted
                under subsection (a) during the reporting period;
                    ``(C) an evaluation by the eligible entity of the
                effectiveness of its use of the Federal funds provided under
                this subpart in leveraging private funds;
                    ``(D) a listing and description of the charter schools
                served during the reporting period;
                    ``(E) a description of the activities carried out by the
                eligible entity to assist charter schools in meeting the
                objectives set forth in section 10324; and
                    ``(F) a description of the characteristics of lenders
                and other financial institutions participating in the
                activities undertaken by the eligible entity under this
                subpart during the reporting period.
            ``(3) Secretarial report.--The Secretary shall review the
        reports submitted under paragraph (1) and shall provide a
        comprehensive annual report to the Congress on the activities
        conducted under this subpart.

    ``SEC. 10328. NO FULL FAITH AND CREDIT FOR GRANTEE OBLIGATIONS.

        ``No financial obligation of an eligible entity entered into
    pursuant to this subpart (such as an obligation under a guarantee, bond,
    note, evidence of debt, or loan) shall be an obligation of, or
    guaranteed in any respect by, the United States. The full faith and
    credit of the United States is not pledged to the payment of funds which
    may be required to be paid under any obligation made by an eligible
    entity pursuant to any provision of this subpart.

    ``SEC. 10329. RECOVERY OF FUNDS.

        ``(a) In General.--The Secretary, in accordance with chapter 37 of
    title 31, United States Code, shall collect--
            ``(1) all of the funds in a reserve account established by an
        eligible entity under section 10325(a) if the Secretary determines,
        not earlier than 2 years after the date on which the entity first
        received funds under this subpart, that the entity has failed to
        make substantial progress in carrying out the purposes described in
        section 10325(a); or
            ``(2) all or a portion of the funds in a reserve account
        established by an eligible entity under section 10325(a) if the
        Secretary determines that the eligible entity has permanently ceased
        to use all or a portion of the funds in such account to accomplish
        any purpose described in section 10325(a).
        ``(b) Exercise of Authority.--The Secretary shall not exercise the
    authority provided in subsection (a) to collect from any eligible entity
    any funds that are being properly used to achieve one or more of the
    purposes described in section 10325(a).
        ``(c) Procedures.--The provisions of sections 451, 452, and 458 of
    the General Education Provisions Act (20 U.S.C. 1234 et seq.) shall
    apply to the recovery of funds under subsection (a).
        ``(d) Construction.--This section shall not be construed to impair
    or affect the authority of the Secretary to recover funds under part D
    of the General Education Provisions Act (20 U.S.C. 1234 et seq.).

    ``SEC. 10330. DEFINITIONS.

        ``In this subpart:
            ``(1) The term `charter school' has the meaning given such term
        in section 10310.

    [[Page 391]]

            ``(2) The term `eligible entity' means--
                    ``(A) a public entity, such as a State or local
                governmental entity;
                    ``(B) a private nonprofit entity; or
                    ``(C) a consortium of entities described in
                subparagraphs (A) and (B).

    ``SEC. 10331. AUTHORIZATION OF APPROPRIATIONS.

        ``For the purpose of carrying out this subpart, there are authorized
    to be appropriated $100,000,000 for fiscal year 2001.''.
        (b) Part C of title X of the Elementary and Secondary Education Act
    of 1965 (20 U.S.C. 8061 et seq.) is amended in each of the following
    provisions by striking ``part'' each place such term appears and
    inserting ``subpart'':
            (1) Sections 10301 through 10305.
            (2) Section 10307.
            (3) Sections 10309 through 10311.
        Sec. 323. (a) Section 8003(b)(2)(F) of the Elementary and Secondary
    Education Act of 1965 (20 U.S.C. 7703(b)(2)(F)) is amended--
            (1) by striking ``the Secretary shall use'' and inserting ``the
        Secretary--
                    ``(i) shall use'';
            (2) by striking the period at the end and inserting ``; and'';
        and
            (3) by adding at the end the following:
                    ``(ii) except as provided in subparagraph (C)(i)(I),
                shall include all of the children described in subparagraphs
                (F) and (G) of subsection (a)(1) enrolled in schools of the
                local educational agency in determining (I) the eligibility
                of the agency for assistance under this paragraph, and (II)
                the amount of such assistance if the number of such children
                meet the requirements of subsection (a)(3).''.
        (b) Section 8003(b)(2) of the Elementary and Secondary Education Act
    of 1965 (20 U.S.C. 7703(b)(2)) is amended by adding at the end the
    following:
                    ``(G) Determination of average tax rates for general
                fund purposes.--For the purpose of determining average tax
                rates for general fund purposes for local educational
                agencies in a State under this paragraph (except under
                subparagraph (C)(i)(II)(bb)), the Secretary shall use
                either--
                    ``(i) the average tax rate for general fund purposes for
                comparable local educational agencies, as determined by the
                Secretary in regulations; or
                    ``(ii) the average tax rate of all the local educational
                agencies in the State.''].
        Sec. 305. (a) Notwithstanding section 321(b)(2)(A) and (3)(A) of the
    Department of Education Appropriations Act, 2001, a State educational
    agency may determine the percentage of the funds allocated to the agency
    under section 321(a)(1)(D) of that Act that the agency shall distribute
    in accordance with section 321(b)(2)(A) and (3) of that Act.
        (b) Notwithstanding section 321(b)(1)(B) of that Act, if a State
    educational agency transfers funds received under section 321(a)(1)(D)
    of that Act to the State entity responsible for the financing of
    education facilities, the State educational agency shall transfer to the
    State entity that share of the administrative funds reserved by the
    agency under section 321(b)(1)(A) of that Act that is in proportion to
    the percentage of funds that the agency determines under subsection (a)
    that it will distribute in accordance with section 321(b)(2) of that
    Act. (Department of Education Appropriations Act, 2001, as enacted by
    section 1(a)(1) of P.L. 106-554.)